Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 20, 2019 | Jun. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | AIR LEASE CORP | ||
Entity Central Index Key | 1,487,712 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.1 | ||
Entity Common Stock, Shares Outstanding | 110,949,850 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 300,127 | $ 292,204 |
Restricted cash | 22,871 | 16,078 |
Flight equipment subject to operating leases | 17,985,324 | 15,100,040 |
Less accumulated depreciation | (2,278,214) | (1,819,790) |
Flight equipment subject to operating leases, net | 15,707,110 | 13,280,250 |
Deposits on flight equipment purchases | 1,809,260 | 1,562,776 |
Other assets | 642,440 | 462,856 |
Total assets | 18,481,808 | 15,614,164 |
Liabilities and Shareholders' Equity | ||
Accrued interest and other payables | 382,132 | 309,182 |
Debt financing, net of discounts and issuance costs | 11,538,905 | 9,698,785 |
Security deposits and maintenance reserves on flight equipment leases | 990,578 | 856,140 |
Rentals received in advance | 119,526 | 104,820 |
Deferred tax liability | 643,767 | 517,795 |
Total liabilities | 13,674,908 | 11,486,722 |
Shareholders' Equity | ||
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding | ||
Paid-in capital | 2,474,238 | 2,260,064 |
Retained earnings | 2,331,552 | 1,866,342 |
Total shareholders' equity | 4,806,900 | 4,127,442 |
Total liabilities and shareholders' equity | 18,481,808 | 15,614,164 |
Class A Common Stock | ||
Shareholders' Equity | ||
Common Stock | 1,110 | 1,036 |
Total shareholders' equity | 1,110 | 1,036 |
Class B Non-Voting Common Stock | ||
Shareholders' Equity | ||
Common Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2010 |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred Stock, shares issued | 0 | 0 | |
Preferred Stock, shares outstanding | 0 | 0 | |
Class A Common Stock | |||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 |
Common Stock, issued shares | 110,949,850 | 103,621,629 | |
Common Stock, outstanding shares | 110,949,850 | 103,621,629 | |
Class B Non-Voting Common Stock | |||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common Stock, authorized shares | 10,000,000 | 10,000,000 | |
Common Stock, issued shares | 0 | 0 | |
Common Stock, outstanding shares | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Rental of flight equipment | $ 1,631,200 | $ 1,450,735 | $ 1,339,002 |
Aircraft sales, trading and other | 48,502 | 65,645 | 80,053 |
Total revenues | 1,679,702 | 1,516,380 | 1,419,055 |
Expenses | |||
Interest | 310,026 | 257,917 | 255,259 |
Amortization of debt discounts and issuance costs | 32,706 | 29,454 | 30,942 |
Interest expense | 342,732 | 287,371 | 286,201 |
Depreciation of flight equipment | 581,985 | 508,352 | 452,682 |
Selling, general and administrative | 97,369 | 91,323 | 82,993 |
Stock-based compensation | 17,478 | 19,804 | 16,941 |
Total expenses | 1,039,564 | 906,850 | 838,817 |
Income before taxes | 640,138 | 609,530 | 580,238 |
Income tax (expense)/benefit | (129,303) | 146,622 | (205,313) |
Net income | $ 510,835 | $ 756,152 | $ 374,925 |
Net income per share of Class A and Class B common stock: | |||
Basic (in dollars per share) | $ 4.88 | $ 7.33 | $ 3.65 |
Diluted (in dollars per share) | $ 4.60 | $ 6.82 | $ 3.44 |
Weighted-average shares outstanding | |||
Basic (in shares) | 104,716,301 | 103,189,175 | 102,801,161 |
Diluted (in shares) | 112,363,331 | 111,657,564 | 110,798,727 |
Dividends declared per share (in dollars per share) | $ 0.43 | $ 0.33 | $ 0.23 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Class A Common Stock | Paid-in Capital | Retained Earnings | Total |
Balance at Dec. 31, 2015 | $ 1,010 | $ 2,227,376 | $ 791,526 | $ 3,019,912 |
Balance (in shares) at Dec. 31, 2015 | 102,582,669 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion | 96 | 96 | ||
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion shares (in shares) | 452,759 | |||
Stock-based compensation | 16,941 | 16,941 | ||
Cash dividends (declared $0.225, $0.325, $0.43 per share for December 31, 2016, 2017 and 2018, respectively) | (23,140) | (23,140) | ||
Tax withholding on stock based compensation | (6,547) | (6,547) | ||
Tax withholding on stock based compensation (in shares) | (190,951) | |||
Net income | 374,925 | 374,925 | ||
Balance at Dec. 31, 2016 | $ 1,010 | 2,237,866 | 1,143,311 | 3,382,187 |
Balance (in shares) at Dec. 31, 2016 | 102,844,477 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion | $ 26 | 9,320 | 9,346 | |
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion shares (in shares) | 942,088 | |||
Stock-based compensation | 19,804 | 19,804 | ||
Cash dividends (declared $0.225, $0.325, $0.43 per share for December 31, 2016, 2017 and 2018, respectively) | (33,579) | (33,579) | ||
Tax withholding on stock based compensation | (6,926) | (6,926) | ||
Tax withholding on stock based compensation (in shares) | (164,936) | |||
Net income | 756,152 | 756,152 | ||
Balance at Dec. 31, 2017 | $ 1,036 | 2,260,064 | 1,866,342 | 4,127,442 |
Balance (in shares) at Dec. 31, 2017 | 103,621,629 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Cumulative effect adjustment upon adoption of ASU 2016-09 | Accounting Standards Update 2016 - 09 | 458 | 458 | ||
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion | $ 75 | 204,244 | 204,319 | |
Issuance of common stock upon exercise of options and warrants, vesting of restricted stock units and convertible debt conversion shares (in shares) | 7,497,770 | |||
Stock-based compensation | 17,478 | 17,478 | ||
Cash dividends (declared $0.225, $0.325, $0.43 per share for December 31, 2016, 2017 and 2018, respectively) | (45,625) | (45,625) | ||
Tax withholding on stock based compensation | $ (1) | (7,548) | (7,549) | |
Tax withholding on stock based compensation (in shares) | (169,549) | |||
Net income | 510,835 | 510,835 | ||
Balance at Dec. 31, 2018 | $ 1,110 | $ 2,474,238 | $ 2,331,552 | $ 4,806,900 |
Balance (in shares) at Dec. 31, 2018 | 110,949,850 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |||
Cash dividends declared per share (in dollars per share) | $ 0.43 | $ 0.325 | $ 0.225 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities | |||
Net income | $ 510,835 | $ 756,152 | $ 374,925 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of flight equipment | 581,985 | 508,352 | 452,682 |
Stock-based compensation | 17,478 | 19,804 | 16,941 |
Deferred taxes | 129,303 | (146,622) | 205,313 |
Amortization of prepaid lease costs | 24,579 | 19,265 | 17,715 |
Amortization of discounts and debt issuance costs | 32,706 | 29,454 | 30,942 |
Gain on aircraft sales, trading and other activity | (34,442) | (74,337) | (76,576) |
Changes in operating assets and liabilities: | |||
Other assets | (74,223) | (108,623) | (55,747) |
Accrued interest and other payables | 51,175 | 50,832 | 45,983 |
Rentals received in advance | 14,705 | 5,436 | 7,900 |
Net cash provided by operating activities | 1,254,101 | 1,059,713 | 1,020,078 |
Investing Activities | |||
Acquisition of flight equipment under operating lease | (2,512,582) | (1,972,009) | (1,914,093) |
Payments for deposits on flight equipment purchases | (976,101) | (773,981) | (868,091) |
Proceeds from aircraft sales, trading and other activity | 391,372 | 779,489 | 988,040 |
Acquisition of furnishings, equipment and other assets | (287,509) | (177,450) | (211,372) |
Net cash used in investing activities | (3,384,820) | (2,143,951) | (2,005,516) |
Financing Activities | |||
Issuance of common stock upon exercise of options and warrants | 4,826 | 9,264 | 20 |
Cash dividends paid | (41,563) | (30,933) | (20,555) |
Tax withholdings on stock-based compensation | (7,548) | (6,926) | (5,890) |
Net change in unsecured revolving facilities | (245,000) | 81,000 | 46,000 |
Proceeds from debt financings | 3,533,885 | 2,183,824 | 2,021,966 |
Payments in reduction of debt financings | (1,270,505) | (1,303,499) | (1,093,910) |
Debt issuance costs | (11,475) | (5,855) | (5,042) |
Security deposits and maintenance reserve receipts | 242,524 | 226,064 | 218,754 |
Security deposits and maintenance reserve disbursements | (59,709) | (51,221) | (58,306) |
Net cash provided by financing activities | 2,145,435 | 1,101,718 | 1,103,037 |
Net increase in cash | 14,716 | 17,480 | 117,599 |
Cash, cash equivalents and restricted cash at beginning of period | 308,282 | 290,802 | 173,203 |
Cash, cash equivalents and restricted cash at end of period | 322,998 | 308,282 | 290,802 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the period for interest, including capitalized interest of $52,817, $46,049 and $40,883 at December 31, 2018, 2017 and 2016, respectively | 332,426 | 301,741 | 293,969 |
Cash paid for income taxes | 4,264 | 5,497 | 1,234 |
Supplemental Disclosure of Noncash Activities | |||
Buyer furnished equipment, capitalized interest, deposits on flight equipment purchases and seller financing applied to acquisition of flight equipment and other assets applied to payments for deposits on flight equipment purchases | 912,075 | 644,206 | 873,828 |
Cash dividends declared, not yet paid | $ 14,421 | $ 10,359 | $ 7,714 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid for interest, capitalized interest | $ 52,817 | $ 46,049 | $ 40,883 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Organization Air Lease Corporation is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar‑Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from the manufacturers, such as Boeing and Airbus. We lease these aircraft to airlines throughout the world to generate attractive returns on equity. As of December 31, 2018, we owned a fleet of 275 aircraft and had 372 aircraft on order and 50 aircraft purchase options with the manufacturers. In addition to our leasing activities, we sell aircraft from our fleet to other leasing companies, financial services companies, airlines and through our asset-backed securities platform. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Principles of consolidation The Company consolidates financial statements of all entities in which we have a controlling financial interest, including the account of any Variable Interest Entity in which we have a controlling financial interest and for which we are the primary beneficiary. All material intercompany balances are eliminated in consolidation. Rental of flight equipment The Company leases flight equipment principally under operating leases and reports rental income ratably over the life of each lease. Rentals received, but unearned, under the lease agreements are recorded in Rentals received in advance on the Company’s Consolidated Balance Sheets until earned. The difference between the rental income recorded and the cash received under the provisions of the lease is included in Lease receivables, as a component of Other assets on the Company’s Consolidated Balance Sheets. An allowance for doubtful accounts will be recognized for past‑due rentals based on management’s assessment of collectability. Management monitors all lessees with past due lease payments and discuss relevant operational and financial issues facing those lessees in order to determine an appropriate allowance for doubtful accounts. In addition, if collection is not reasonably assured, the Company will not recognize rental income for amounts due under the Company’s lease contracts and will recognize revenue for such lessees on a cash basis. All of the Company’s lease agreements are triple net leases whereby the lessee is responsible for all taxes, insurance, and aircraft maintenance. In the future, we may incur repair and maintenance expenses for off-lease aircraft. We recognize repair and maintenance expense in our Consolidated Statements of Income for all such expenditures. In many operating lease contracts, the lessee is obligated to make periodic payments, which are calculated with reference to the utilization of the airframe, engines, and other major life-limited components during the lease. In these leases, we will make a payment to the lessee to compensate the lessee for the cost of the Qualifying Event incurred, up to the maximum of the amount of Maintenance Reserves payment made by the lessee during the lease term, net of previous reimbursements. These payments are made upon the lessee’s presentation of invoices evidencing the completion of such Qualifying Event. The Company records as Rental of flight equipment revenue, the portion of Maintenance Reserves that is virtually certain will not be reimbursed to the lessee. Maintenance Reserves payments which we may be required to reimburse to the lessee are reflected in our overhaul reserve liability, as a component of Security deposits and overhaul reserves on flight equipment leases in our Consolidated Balance Sheets. Any Maintenance Reserves or end of lease payments collected that were not reimbursed to the lessee during the term of the lease for a Qualifying Event are recognized as rental revenues at the end of the lease. Leases that contain provisions which require us to pay a portion of a lessee's major maintenance based on the usage of the aircraft and major life-limited components that were incurred prior to the current lease are recorded as lease incentives based on estimated payments we expect to pay the lessee. These lease incentives are amortized as a reduction of rental revenues over the term of the lease. Lessee-specific modifications are capitalized as initial direct costs and amortized over the term of the lease into rental revenue in our Consolidated Statements of Income. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606).” The amendments in ASU 2014-09 supersede current revenue recognition requirements. The guidance specifically notes that lease contracts are a scope exception. ASU 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. Further, the guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Effective January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers (Topic 606) using the modified retrospective approach. Adopting this standard did not have a material impact to our consolidated financial statements and related disclosures. As the standard did not apply to lease contracts within the scope of FASB Accounting Standard Codification (“ASC”) 840 Leases, we evaluated the recognition of gains on sale of flight equipment under the scope of the new standard. Under ASU 2014-09, a performance obligation is satisfied, and the related revenue recognized when control of the underlying goods or services related to the performance obligation is transferred to the customer. Our performance obligation associated with the sale of flight equipment is satisfied upon delivery of the flight equipment to a customer, which is the point in time where control of the underlying flight equipment has transferred to the buyer. At the time flight equipment is retired or sold, the cost and accumulated depreciation are removed from the related accounts and the difference, net of transaction price, is recorded as a gain or loss. Since there was no net income impact upon adoption of the new guidance, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Initial direct costs The Company records as period costs those internal and other costs incurred in connection with identifying, negotiating, and delivering aircraft to the Company's lessees. Amounts paid by us to lessees and/or other parties in connection with originating lease transactions are capitalized as lease incentives and are amortized over the lease term. Additionally, regarding the extension of leases that contain maintenance reserve provisions, the Company considers maintenance reserves that were previously recorded as revenue and no longer meet the virtual certainty criteria as a function of the extended lease term as lease incentives and capitalizes such reserves. The amortization of lease incentives are recorded as a reduction of lease revenue in the Consolidated Statements of Income. Cash, cash equivalents and restricted cash The Company considers cash and cash equivalents to be cash on hand and highly liquid investments with original maturity dates of 90 days or less. Restricted cash consists of pledged security deposits, maintenance reserves, and rental payments related to secured aircraft financing arrangements. The following table reconciles cash, cash equivalents and restricted cash reported in our Consolidated Balance Sheets to the total amount presented in our consolidated statement of cash flows (in thousands): December 31, December 31, 2018 2017 Cash and cash equivalents $ 300,127 $ 292,204 Restricted cash 22,871 16,078 Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 322,998 $ 308,282 Flight equipment Flight equipment under operating lease is stated at cost less accumulated depreciation. Purchases, major additions and modifications, and interest on deposits during the construction phase are capitalized. The Company generally depreciates passenger aircraft on a straight‑line basis over a 25‑year life from the date of manufacture to a 15% residual value. Changes in the assumption of useful lives or residual values for aircraft could have a significant impact on the Company’s results of operations and financial condition. Major aircraft improvements and modifications incurred during an off-lease period are capitalized and depreciated over the remaining life of the flight equipment. In addition, costs paid by us for scheduled maintenance and overhauls are capitalized and depreciated over a period to the next scheduled maintenance or overhaul event. Miscellaneous repairs are expensed when incurred. Management evaluates on a quarterly basis the need to perform an impairment test whenever facts or circumstances indicate a potential impairment has occurred. An assessment is performed whenever events or changes in circumstances indicate that the carrying amount of an aircraft may not be recoverable. Recoverability of an aircraft’s carrying amount is measured by comparing the carrying amount of the aircraft to future undiscounted net cash flows expected to be generated by the aircraft. The undiscounted cash flows consist of cash flows from currently contracted leases, future projected lease rates, and estimated residual or scrap values for each aircraft. We develop assumptions used in the recoverability analysis based on our knowledge of active lease contracts, current and future expectations of the global demand for a particular aircraft type, and historical experience in the aircraft leasing market and aviation industry, as well as information received from third‑party industry sources. The factors considered in estimating the undiscounted cash flows are affected by changes in future periods due to changes in contracted lease rates, economic conditions, technology, and airline demand for a particular aircraft type. In the event that an aircraft does not meet the recoverability test, the aircraft will be recorded at fair value in accordance with the Company’s Fair Value Policy, resulting in an impairment charge. Our Fair Value Policy is described below under “Fair Value Measurements”. Maintenance Rights The Company identifies, measures, and accounts for maintenance right assets and liabilities associated with its acquisitions of aircraft with in-place leases. A maintenance right asset represents the fair value of the Company’s contractual right under a lease to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents the Company’s obligation to pay the lessee for the difference between the lease end contractual maintenance condition of the aircraft and the actual maintenance condition of the aircraft on the acquisition date. The Company’s aircraft are typically subject to triple-net leases pursuant to which the lessee is responsible for maintenance, which is accomplished through one of two types of provisions in its leases: (i) end of lease return conditions (“EOL Leases”) or (ii) periodic maintenance payments (“MR Leases”). (i) EOL Leases Under EOL Leases, the lessee is obligated to comply with certain return conditions which require the lessee to perform maintenance on the aircraft or make cash compensation payments at the end of the lease to bring the aircraft into a specified maintenance condition. Maintenance right assets in EOL Leases represent the difference in value between the contractual right to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. Maintenance right liabilities exist in EOL Leases if, on the acquisition date, the maintenance condition of the aircraft is greater than the contractual return condition in the lease and the Company is required to pay the lessee in cash for the improved maintenance condition. Maintenance right assets, net of accumulated amortization, are recorded as a component of Flight equipment subject to operating leases on the Consolidated Balance Sheets. When the Company has recorded maintenance right assets with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment to the Company by the lessee, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent the improvement is substantiated and deemed to meet the Company’s capitalization policy; (ii) the lessee pays the Company cash compensation at lease expiry in excess of the value of the maintenance right asset, the maintenance right asset is relieved, and any excess is recognized as end of lease income; or (iii) the lessee pays the Company cash compensation at lease expiry that is less than the value of the maintenance right asset, the cash is applied to the maintenance right asset, and the balance of such asset is relieved and recorded as an aircraft improvement to the extent the improvement is substantiated and meets the Company’s capitalization policy. Any aircraft improvement will be depreciated over a period to the next scheduled maintenance event in accordance with the Company’s policy with respect to major maintenance and included in Depreciation of flight equipment on the Company’s Consolidated Statements of Income. When the Company has recorded maintenance right liabilities with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment by the Company to the lessee, the maintenance right liability is relieved, and end of lease income is recognized; (ii) the Company pays the lessee cash compensation at lease expiry of less than the value of the maintenance right liability, the maintenance right liability is relieved, and any difference is recognized as end of lease income; or (iii) the Company pays the lessee cash compensation at lease expiry in excess of the value of the maintenance right liability, the maintenance right liability is relieved, and the excess amount is recorded as an aircraft improvement to the extent of that it meets our capitalization policy. (ii) MR Leases Under MR Leases, the lessee is required to make periodic payments to us for maintenance based upon planned usage of the aircraft. When a Qualifying Event occurs during the lease term, the Company is required to reimburse the lessee for the costs associated with such an event. At the end of lease, the Company is entitled to retain any cash receipts in excess of the required reimbursements to the lessee. Maintenance right assets in MR Leases represent the right to receive an aircraft in an improved condition relative to the actual condition on the acquisition date. The aircraft is improved by the performance of a Qualifying Event paid for by the lessee who is reimbursed by the Company from the periodic maintenance payments that it receives. Maintenance right assets, net of accumulated amortization, are recorded as a component of Flight equipment subject to operating leases on the Consolidated Balance Sheets. When the Company has recorded maintenance right assets with respect to MR Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry and no Qualifying Event has been performed by the lessee since the acquisition date, the maintenance right asset is offset by the amount of the associated maintenance payment liability, and any excess is recorded as end of lease income; or (ii) the Company has reimbursed the lessee for the performance of a Qualifying Event, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent of that it meets our capitalization policy. There are no maintenance right liabilities for MR Leases. When flight equipment is sold, maintenance rights are included in the calculation of the disposition gain or loss. For the year ended December 31, 2018, the Company purchased nine aircraft in the secondary market, two of which were subject to existing leases. The total cost for the two aircraft was $73.3 million, which included maintenance right assets of $13.2 million. For the year ended December 31, 2017, the Company did not purchase any aircraft in the secondary market subject to an existing lease. As of December 31, 2018 and 2017, the Company had maintenance right assets, net of accumulated amortization of $46.4 million and $44.6 million, respectively. Maintenance right assets are included under Flight equipment subject to operating leases in our Consolidated Balance Sheets. Flight equipment held for sale Management evaluates all contemplated aircraft sale transactions to determine whether all the required criteria have been met under Generally Accepted Accounting Principles (“GAAP”) to classify aircraft as flight equipment held for sale. Management uses judgment in evaluating these criteria. Due to the significant uncertainties of potential sale transactions, the held for sale criteria generally will not be met unless the aircraft is subject to a signed sale agreement, or management has made a specific determination and obtained appropriate approvals to sell a particular aircraft or group of aircraft. Aircraft classified as flight equipment held for sale are recognized at the lower of their carrying amount or estimated fair value less estimated costs to sell. At the time aircraft are classified as flight equipment held for sale, depreciation expense is no longer recognized. Capitalized interest The Company may borrow funds to finance deposits on new flight equipment purchases. The Company capitalizes interest expense on such borrowings. The capitalized amount is calculated using our composite borrowing rate and is recorded as an increase to the cost of the flight equipment on our Consolidated Balance Sheets at the time of purchase. Fair value measurements Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures the fair value of certain assets on a non-recurring basis, principally our flight equipment, when GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable. The Company records flight equipment at fair value when we determine the carrying value may not be recoverable. The Company principally uses the income approach to measure the fair value of flight equipment. The income approach is based on the present value of cash flows from contractual lease agreements and projected future lease payments, including contingent rentals, net of expenses, which extend to the end of the aircraft’s economic life in its highest and best use configuration, as well as a disposition value based on expectations of market participants. These valuations are considered Level 3 valuations, as the valuations contain significant non‑observable inputs. Income taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets when the probability of realization of the full value of the asset is less than 50%. The Company recognizes the impact of a tax position, if that position is more than 50% likely to be sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes interest and penalties for uncertain tax positions in income tax expense. Deferred costs The Company incurs debt issuance costs in connection with debt financings. Those costs are deferred and amortized over the life of the specific loan using the effective interest method and charged to interest expense. The Company also incurs costs in connection with equity offerings. Such costs are deferred until the equity offering is completed and either netted against the equity raised, or expensed if the equity offering is abandoned. Investments Our investment in the Blackbird Capital I, LLC (“Blackbird I”) and Blackbird Capital II, LLC (“Blackbird II”) joint ventures, where we own 9.5% of the equity of each venture, is accounted for using the equity method of accounting due to our level of influence and involvement in the joint ventures. The investments are recorded at the amount invested plus or minus our 9.5% share of net income or loss, less any distributions or return of capital received from the entities. Our investment in Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”), where we own 5.1%, is accounted for using the cost method of accounting. The investment is recorded at the amount invested less any return of capital received from the entity. Stock ‑ based compensation Stock‑based compensation cost is measured at the grant date based on the fair value of the award. Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made in the prior years' consolidated financial statements to conform to the classifications in 2018. Recently adopted accounting standards In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), “Statement of Cash Flows (Topic 230).” The amendments in ASU 2016-15 address eight classification issues related to the statement of cash flows. The Company adopted ASU 2016-15 using the retrospective transition method. The adoption of this standard did not have an impact on the current period or prior period consolidated financial statements. In November 2016, FASB issued ASU No. 2016-18 (“ASU 2016-18”), “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires entities to present the aggregate changes in cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. In addition, when cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, ASU 2016-18 requires a reconciliation of the totals in the statement of cash flows to the related captions on the balance sheet. The Company adopted ASU 2016-18 retrospectively as of January 1, 2018. The adoption of this standard did not have a material impact on the current period or prior period consolidated financial statements. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842)”. The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases”, which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In addition, in August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842”, which includes an option to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than restate comparative periods in transition. In December 2018, the FASB issued ASU 2018-20, “Narrow-Scope Improvements for Lessors”. This ASU provides an election for lessors to exclude sales and related taxes from consideration in the contract and requires lessors to exclude from revenue and expense lessor costs paid directly to a third party by lessees. The standards will be effective for annual reporting periods beginning after December 15, 2018 for public entities and is required to be applied using the modified retrospective transition approach. The Company will adopt the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company will continue to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, we noted that Lessor accounting is similar to the current model, but the guidance will impact us in scenarios where we are the Lessee. The Company currently expects to recognize operating lease right-of-use assets and operating lease liabilities on our Consolidated Balance Sheets in the amounts of approximately $44.9 million and approximately $51.4 million, respectively. We do not expect the impact of this standard to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. ASU 2016-13 affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses”. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The Company is evaluating the potential effects on the consolidated financial statements. |
Debt Financing
Debt Financing | 12 Months Ended |
Dec. 31, 2018 | |
Debt Financing | |
Debt Financing | Note 2. Debt Financing The Company’s consolidated debt as of December 31, 2018 and 2017 is summarized below: December 31, December 31, 2018 2017 (in thousands) Unsecured Senior notes $ 10,043,445 $ 8,019,871 Term financings 607,340 203,704 Revolving credit facility 602,000 847,000 Convertible senior notes — 199,983 Total unsecured debt financing 11,252,785 9,270,558 Secured Term financings 371,203 484,036 Export credit financing 38,265 44,920 Total secured debt financing 409,468 528,956 Total debt financing 11,662,253 9,799,514 Less: Debt discounts and issuance costs (123,348) (100,729) Debt financing, net of discounts and issuance costs $ 11,538,905 $ 9,698,785 At December 31, 2018, management of the Company believes it is in compliance in all material respects with the covenants in its debt agreements, including its financial covenants concerning debt-to-equity, tangible net equity, and interest coverage ratios. The Company’s secured obligations as of December 31, 2018 and 2017 are summarized below: December 31, December 31, 2018 2017 (in thousands, except for number of aircraft) Nonrecourse $ 167,245 $ 205,906 Recourse 242,223 323,050 Total $ 409,468 $ 528,956 Number of aircraft pledged as collateral 20 21 Net book value of aircraft pledged as collateral $ 1,132,111 $ 1,184,264 Senior unsecured notes (including Medium-Term Note Program) As of December 31, 2018, the Company had $10.0 billion in aggregate principal amount of senior unsecured notes outstanding with remaining terms ranging from 0.1 years to 9.8 years and bearing interest at fixed rates ranging from 2.125% to 7.375% with one note bearing interest at a floating rate of LIBOR plus 1.125%. As of December 31, 2017, the Company had $8.0 billion in aggregate principal amount of senior unsecured notes outstanding bearing interest at fixed rates ranging from 2.125% to 7.375%. During the year ended December 31, 2018, the Company issued $2.95 billion in aggregate principal amount of senior unsecured notes with maturity dates ranging between 2021 and 2028 and bearing interest at fixed rates ranging from 2.50% to 4.625%. In January 2018, the Company issued $1.25 billion in aggregate principal amount of unsecured notes including (i) $550.0 million due 2021 that bear interest at a rate of 2.50% and (ii) $700.0 million due 2025 that bear interest at a rate of 3.250%. In June 2018, the Company issued $500.0 million in aggregate principal amount of senior unsecured notes due 2023 that bear interest at a rate of 3.875%. In September 2018, the Company issued $1.2 billion in aggregate principal amount of senior unsecured notes including (i) $700.0 million due 2022 that bear interest at a rate of 3.500% and (ii) $500.0 million due 2028 at a rate of 4.625%. In November 2018, the Company also issued $75.0 million aggregate principal amount of senior unsecured notes due 2022 in a private placement that was not registered with the Securities and Exchange Commission, bearing interest at LIBOR plus a margin of 1.125% per year. Furthermore, on November 20, 2018, the Company established a Medium-Term Note Program, under which the Company may issue, from time to time, up to $15.0 billion of debt securities designated as its Medium-Term Notes, Series A. The Company issued $700.0 million in aggregate principal amount of 4.250% Medium-Term Notes, Series A, due February 1, 2024 under its Medium-Term Note Program in January 2019. Unsecured term financings From time to time, the Company enters into unsecured term facilities. During 2018, the Company entered into three additional unsecured term facilities aggregating $553.0 million, including (i) a $518.0 million term facility with a term of four years and bearing interest at a floating rate of LIBOR plus 1.125%, which varies based on the Company’s credit rating; (ii) a $20.0 million term facility with a term of four years and bearing interest at a rate of LIBOR plus 0.950%, which varies based on the Company's credit rating; and (iii) a $15.0 million term facility with a term of five years and bearing interest at a fixed rate of 3.50%. The outstanding balance on our unsecured term facilities as of December 31, 2018 was $607.3 million, bearing interest at fixed rates ranging from 2.75% to 3.50% and two facilities bearing interest at floating rates ranging from LIBOR plus 0.950% to LIBOR plus 1.125%. As of December 31, 2018, the remaining maturities of all unsecured term facilities ranged from approximately 0.1 years to approximately 4.5 years. As of December 31, 2017, the outstanding balance on our unsecured term facilities was $203.7 million. Unsecured revolving credit facility The total amount outstanding under the Company's unsecured revolving credit facility was $602.0 million and $847.0 million as of December 31, 2018 and 2017, respectively. During the first three months of 2018, we increased the aggregate capacity of our unsecured revolving credit facility by $300.0 million to $4.1 billion. In May 2018, the Company amended and extended its four-year unsecured revolving credit facility whereby, among other things, the Company extended the final maturity date from May 5, 2021 to May 5, 2022 and increased the total revolving commitments to approximately $4.5 billion from approximately $4.1 billion at an interest rate of LIBOR plus 1.05% with a 0.20% facility fee. On October 23, 2018, the Company executed a commitment increase to the facility, which increased the aggregate facility capacity by an additional $50.0 million to approximately $4.6 billion. Lenders hold revolving commitments totaling approximately $4.2 billion that mature on May 5, 2022, commitments totaling $20.0 million that mature on May 5, 2021, commitments totaling $93.0 million that mature on May 5, 2020, and commitments totaling $275.0 million that mature on May 5, 2019. In February 2019, the Company entered into agreements to its revolving commitments by $135.0 million to $4.7 billion. Convertible senior notes In November 2011, the Company issued $200.0 million in aggregate principal amount of 3.875% convertible senior notes due 2018 in an offering exempt from registration under the Securities Act. During the year ended December 31, 2018, $199.8 million in aggregate principal amount of the convertible notes were converted at a weighted average price of $29.22 per share, resulting in the issuance of 6,838,546 shares of our Class A Common Stock. The remaining $151,000 aggregate outstanding principal amount of the Convertible Notes matured on December 1, 2018. Secured term financings We fund some aircraft purchases through secured term financings. Our various consolidated entities will borrow through secured bank facilities to purchase an aircraft. The aircraft are then leased by our entities to airlines. We may guarantee the obligations of the entities under the loan agreements. The loans may be secured by a pledge of the shares of the entities, the aircraft, the lease receivables, security deposits, maintenance reserves, or a combination thereof. As of December 31, 2018, the outstanding balance on our secured term facilities was $371.2 million and we had pledged 18 aircraft as collateral with a net book value of $1.1 billion. The outstanding balance under our secured term facilities as of December 31, 2018 was comprised of a $0.5 million fixed rate facility with an interest rate of 4.58% and $370.7 million of floating rate debt with interest rates ranging from LIBOR plus 1.15% to LIBOR plus 2.99%. As of December 31, 2018, the remaining maturities of all secured term facilities ranged from approximately 0.1 years to approximately 4.5 years. As of December 31, 2017, the outstanding balance on our secured term facilities was $484.0 million and we had pledged 19 aircraft as collateral with a net book value of $1.1 billion. The outstanding balance under our secured term facilities as of December 31, 2017 was comprised of $2.6 million fixed rate debt consisting of one facility with an interest rate of 4.58% and $481.5 million floating rate debt, with interest rates ranging from LIBOR plus 1.15% to LIBOR plus 2.99%. Export credit financings As of December 31, 2018, the Company had $38.3 million in export credit financing outstanding. As of December 31, 2017, the Company had $44.9 million in export credit financing outstanding. In March 2013, the Company issued $76.5 million in secured notes due 2024 guaranteed by the Export‑Import Bank. The Company used the proceeds of the offering to refinance a portion of the purchase price of two Boeing aircraft, which serve as collateral for the notes, and the related premium charged by Export-Import Bank for its guarantee of the notes. The notes will mature on August 15, 2024 and bear interest at a rate of 1.617% per annum. Maturities Maturities of debt outstanding as of December 31, 2018 are as follows: Years ending December 31, (in thousands) 2019 $ 1,083,726 2020 1,220,454 2021 1,685,961 2022 3,071,445 2023 1,870,676 Thereafter 2,729,991 Total $ 11,662,253 |
Interest Expense
Interest Expense | 12 Months Ended |
Dec. 31, 2018 | |
Interest Expense | |
Interest Expense | Note 3. Interest Expense The following table shows the components of interest for the years ended December 31, 2018, 2017 and 2016: Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 (in thousands) Interest on borrowings $ 362,843 $ 303,966 $ 296,142 Less capitalized interest (52,817) (46,049) (40,883) Interest 310,026 257,917 255,259 Amortization of discounts and deferred debt issue costs 32,706 29,454 30,942 Interest expense $ 342,732 $ 287,371 $ 286,201 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity | |
Shareholders' Equity | Note 4. Shareholders’ Equity In 2010, the Company authorized 500,000,000 shares of Class A common stock, $0.01 par value per share, of which 110,949,850 and 103,621,629 shares were issued and outstanding as of December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, the Company had authorized 10,000,000 shares of Class B Non‑Voting common stock, $0.01 par value per share, of which no shares were outstanding as of December 31, 2018 and 2017. In November 2011, the Company issued $200.0 million in aggregate principal amount of 3.875% convertible senior notes due 2018 in an offering exempt from registration under the Securities Act. During the year ended December 31, 2018, $199.8 million in aggregate principal amount of the convertible notes were converted at a weighted average price of $29.22 per share, resulting in the issuance of 6,838,546 shares of our Class A Common Stock. The remaining $151,000 aggregate outstanding principal amount of the Convertible Notes matured on December 1, 2018. On June 4, 2010, the Company issued 482,625 warrants for the purchase of up to 482,625 shares of Class A common stock to two institutional investors (the “Committed Investors”). The warrants had a seven-year term and an exercise price of $20 per share. The Company used the BSM option pricing model to determine the fair value of warrants. The fair value of warrants was calculated on the date of grant by an option‑pricing model using a number of complex and subjective variables. These variables include expected stock price volatility over the term of the warrant, projected exercise behavior, a risk‑free interest rate, and expected dividends. The warrants had a fair value at the grant date of $5.6 million. The warrants are classified as an equity instrument and the proceeds from the issuance of common stock to the Committed Investors was split between the warrants and the stock based on fair value of the warrants and recorded as an increase to Paid‑in capital on the Consolidated Balance Sheets. On March 9, 2017, a Committed Investor performed a cashless exercise of the remaining 268,125 warrants, resulting in the issuance of 131,001 shares of Class A common stock. As of December 31, 2018 and 2017, the Company did not have any warrants outstanding. As of December 31, 2018 and 2017 the Company had authorized 50,000,000 shares of preferred stock, $0.01 par value per share, of which no shares were issued or outstanding. |
Rental Income
Rental Income | 12 Months Ended |
Dec. 31, 2018 | |
Rental Income | |
Rental Income | Note 5. Rental Income At December 31, 2018, minimum future rentals on non‑cancellable operating leases of flight equipment in our fleet, which have been delivered as of December 31, 2018, are as follows: Years ending December 31, (in thousands) 2019 $ 1,742,589 2020 1,689,333 2021 1,587,150 2022 1,455,673 2023 1,270,209 Thereafter 4,030,672 Total $ 11,775,626 The Company recorded $24.9 million, $40.9 million, and $29.0 million in maintenance reserve revenue based on our lessees’ usage of the aircraft for the years ended December 31, 2018, 2017, and 2016, respectively. The following table shows the scheduled lease terminations (for the minimum non‑cancellable period which does not include contracted unexercised lease extension options) of our operating lease portfolio, excluding one aircraft currently off lease, as of December 31, 2018, updated through February 21, 2019: Aircraft Type 2019 2020 2021 2022 2023 Thereafter Total Airbus A319-100 — — 1 — — — 1 Airbus A320-200 — 8 3 3 6 15 35 Airbus A320-200neo — — — — — 6 6 Airbus A321-200 — 2 1 1 8 22 34 Airbus A321-200neo — 1 1 — — 12 14 Airbus A330-200 2 — 1 2 3 7 15 Airbus A330-300 — — — 2 1 2 5 Airbus A330-900neo — — — — — 1 1 Airbus A350-900 — — — — — 6 6 Boeing 737-700 1 — 1 — 2 — 4 Boeing 737-800 2 3 9 11 13 60 98 Boeing 737-8 MAX — — — — — 14 14 Boeing 777-200ER — — — 1 — — 1 Boeing 777-300ER — — 3 4 4 13 24 Boeing 787-9 — — — — — 15 15 Embraer E190 — 1 — — — — 1 Total 5 15 20 24 37 173 274 |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2018 | |
Concentration of Risk | |
Concentration of Risk | Note 6. Concentration of Risk Geographical and credit risks As of December 31, 2018, all of the Company's Rental of flight equipment revenues were generated by leasing flight equipment to foreign and domestic airlines, and the Company leased and managed aircraft to 94 customers whose principal places of business are located in 56 countries as of December 31, 2018 compared to 91 lessees in 55 countries as of December 31, 2017. Over 95% of our aircraft are operated internationally. The following table sets forth the regional concentration based on each airline's principal place of business of our aircraft portfolio based on net book value as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Net Book Net Book Region Value (1) % of Total Value (1) % of Total (in thousands, except percentages) Europe $ 4,692,341 29.9 % $ 4,205,431 31.7 % Asia (excluding China) 3,846,785 24.5 % 2,981,339 22.4 % China 2,663,903 17.0 % 2,720,124 20.5 % The Middle East and Africa 1,952,900 12.4 % 1,481,825 11.2 % Central America, South America, and Mexico 1,078,900 6.9 % 926,732 7.0 % U.S. and Canada 757,884 4.8 % 599,367 4.5 % Pacific, Australia, and New Zealand 714,397 4.5 % 365,432 2.7 % Total $ 15,707,110 100.0 % $ 13,280,250 100.0 % (1) As of December 31, 2018, we had six aircraft held for sale. We did not have any aircraft held for sale as of December 31, 2017. At December 31, 2018 and 2017, we owned and managed leased aircraft to customers in the following regions based on each airline's principal place of business: December 31, 2018 December 31, 2017 Number of Number of Region Customers (1) % of Total Customers (1) % of Total Europe 33 35.1 % 31 34.0 % Asia (excluding China) 18 19.1 % 18 19.8 % The Middle East and Africa 11 11.8 % 11 12.1 % U.S. and Canada 10 10.6 % 11 12.1 % Central America, South America, and Mexico 10 10.6 % 9 9.9 % China 9 9.6 % 9 9.9 % Pacific, Australia, and New Zealand 3 3.2 % 2 2.2 % Total 94 100.0 % 91 100.0 % (1) A customer is an airline with its own operating certificate. The following table sets forth the dollar amount and percentage of our Rental of flight equipment revenues attributable to the indicated regions based on each airline’s principal place of business: Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Amount of Amount of Amount of Rental Rental Rental Region Revenue % of Total Revenue % of Total Revenue % of Total (in thousands, except percentages) Europe $ 476,515 29.2 % $ 450,628 31.1 % $ 400,491 29.9 % Asia (excluding China) 412,465 25.3 % 332,284 22.9 % 308,658 23.1 % China 329,977 20.2 % 324,147 22.3 % 293,206 21.9 % The Middle East and Africa 179,497 11.0 % 116,799 8.1 % 106,300 7.9 % Central America, South America, and Mexico 108,736 6.7 % 102,205 7.0 % 112,068 8.4 % U.S. and Canada 77,678 4.8 % 76,685 5.3 % 69,918 5.2 % Pacific, Australia, and New Zealand 46,332 2.8 % 47,987 3.3 % 48,361 3.6 % Total $ 1,631,200 100.0 % $ 1,450,735 100.0 % $ 1,339,002 100.0 % Based on our lease placements of future new aircraft deliveries, we anticipate that a majority of our aircraft will be located in the Europe and Asia regions. For the years ended December 31, 2018, 2017, and 2016, China was the only individual country that represented at least 10% of our rental revenue based on each airline's principal place of business. In 2018, 2017, and 2016, no individual airline represented at least 10% of our rental revenue. Currency risk The Company attempts to minimize currency and exchange risks by entering into aircraft purchase agreements and a majority of lease agreements and debt agreements with U.S. dollars as the designated payment currency. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 7. Income Taxes The provision for income taxes consists of the following: Year Ended December 31, 2018 2017 2016 (in thousands) Current: Federal $ — $ — $ — State 492 380 30 Foreign 2,839 3,853 848 Deferred: Federal 125,160 (150,850) 203,882 State 812 (5) 553 Foreign — — — Provision for income taxes $ 129,303 $ (146,622) $ 205,313 Differences between the provision for income taxes and income taxes at the statutory federal income tax rate are as follows: Year Ended December 31, 2018 2017 2016 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Income taxes at statutory federal rate $ 134,429 21.0 % $ 213,336 35.0 % $ 203,083 35.0 % Impact of tax legislation — — (354,127) (58.1) — — Foreign tax credit (9,600) (1.5) (10,873) (1.8) — — State income taxes, net of federal income tax effect and other 4,474 0.7 5,042 0.9 2,230 0.4 Provision for income taxes $ 129,303 20.2 % $ (146,622) (24.0) % $ 205,313 35.4 % On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018, repealing the Alternative Minimum Tax (“AMT”), changes to tax depreciation, limitations on interest expense deductions, and limitations on utilization of net operating losses. Accounting Standards Codification (“ASC”) 740 requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, the Company recorded an estimated tax benefit of $354.1 million due to the remeasurement of deferred tax assets and liabilities in the year ended December 31, 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allowed registrants to record provisional amounts for the effects of the Tax Reform Act during a measurement period not to extend beyond one year of the enactment date. In accordance with SAB 118, the Company determined that the $354.1 million benefit resulting from the remeasurement of certain deferred tax assets and liabilities is a provisional amount and a reasonable estimate of the impact of the Tax Reform Act on the Consolidated Financial Statements as of December 31, 2017. In the fourth quarter of 2018, the Company completed its accounting for the income tax effects of the Tax Reform Act, and no material adjustments were required to the provisional amounts initially recorded. The Company recorded a $9.6 million and $10.9 million benefit related to Foreign Tax Credit (“FTC”) in December 31, 2018 and 2017, respectively. The Company has determined there will be sufficient foreign source income projected to utilize these credits. In the first quarter of 2017, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires all excess tax benefits and tax deficiencies to be recognized in the income statement when the awards vest or are settled. Upon adoption of ASU 2016-09, the Company recognized $0.5 million of previously unrecognized windfall tax benefits in retained earnings. As of December 31, 2018 and 2017, the Company’s net deferred tax assets (liabilities) are as follows: December 31, December 31, 2018 2017 (in thousands) Assets (Liabilities) Equity compensation $ 11,951 $ 12,744 Net operating losses 17 10,143 Foreign tax credit 2,425 14,577 Rents received in advance 25,165 22,076 Accrued bonus 2,825 1,777 Straight-line rents (320) (1,967) Other 1,972 1,912 Aircraft depreciation (687,802) (579,057) Net deferred tax assets/(liabilities) $ (643,767) $ (517,795) The Company has net operating loss carry forwards (“NOLs”) for federal and state income tax purposes of $0.2 million and $54.1 million as of December 31, 2018 and 2017, respectively, which are available to offset future taxable income in future periods. The Company has FTCs for federal income tax purposes of $2.4 million and $14.6 million as of December 31, 2018 and 2017, which are available to offset future taxable income in future periods. The Company did not generate a NOL for the year ended December 31, 2018 and 2017. The Company's loss and tax credit carryforwards expire in the following periods: NOL Tax Credit Carryforwards Carryforwards (in thousands) 2019-2023 $ — $ — Thereafter 244 2,425 Total carryforwards $ 244 $ 2,425 The Company has not recorded a deferred tax valuation allowance as of December 31, 2018 and 2017 as realization of the deferred tax asset is considered more likely than not. In assessing the realizability of the deferred tax assets, management considered whether future taxable income will be sufficient during the periods in which those temporary differences are deductible before NOLs and FTCs expire. Management considers the scheduled reversal of deferred tax liabilities, projected taxable income, and tax planning strategies in making this assessment. Management anticipates the timing differences on aircraft depreciation will reverse and be available for offsetting the reversal of deferred tax assets. As of December 31, 2018 and 2017 the Company has not recorded any liability for unrecognized tax benefits. The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The Company is subject to examinations by the major tax jurisdictions for the 2014 tax year and forward. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Aircraft Acquisition As of December 31, 2018, we had commitments to acquire a total of 372 new aircraft for delivery through 2024 as follows: Aircraft Type 2019 2020 2021 2022 2023 Thereafter Total Airbus A320/321neo (1) 25 40 22 25 25 — 137 Airbus A330-900neo 9 2 5 6 2 — 24 Airbus A350-900/1000 4 3 6 3 2 — 18 Boeing 737-7/8/9 MAX 28 28 34 34 25 5 154 Boeing 787-9/10 12 10 8 9 — — 39 Total (2) 78 83 75 77 54 5 372 (1) Our Airbus A320/321neo aircraft orders include 57 long-range variants. (2) In addition to the aircraft from our orderbook, we have a commitment to purchase two used Airbus A330-300 aircraft from a third party, which are scheduled for delivery in 2019. Airbus has informed us to expect several month delivery delays relating to certain aircraft scheduled for delivery in 2019 and 2020. The delays have been reflected in our commitment schedules above. Our leases contain lessee cancellation clauses related to aircraft delivery delays, typically for aircraft delays greater than one year. Our purchase agreements contain similar clauses. As of February 21, 2019, none of our lease contracts were subject to cancellation. Commitments for the acquisition of these aircraft and other equipment at an estimated aggregate purchase price (including adjustments for inflation) of approximately $26.3 billion as of December 31, 2018 are as follows: Years ending December 31, (in thousands) 2019 $ 6,128,796 2020 6,065,522 2021 5,733,510 2022 5,243,482 2023 2,896,500 Thereafter 221,130 Total $ 26,288,940 In addition to the Company's commitments, as of December 31, 2018, the Company had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. Deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024. We have made non‑refundable deposits on the aircraft for which we have commitments to purchase of $1.8 billion and $1.6 billion as of December 31, 2018 and 2017, respectively, which are subject to manufacturer performance commitments. If we are unable to satisfy our purchase commitments, we may be forced to forfeit our deposits. Further, we would be exposed to breach of contract claims by our lessees and manufacturers. Office Lease The Company’s leases for office space provides for step rentals over the term of the lease. Those rentals are considered in the evaluation of recording rent expense on a straight‑line basis over the term of the lease. Tenant improvement allowances received from the lessor are deferred and amortized in selling, general and administrative expenses against rent expense. The Company recorded office lease expense (net of sublease income) of $2.9 million, $2.3 million, and $2.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. Commitments for minimum rentals under the non‑cancellable lease term at December 31, 2018 are as follows: Years ending December 31, (in thousands) 2019 $ 3,358 2020 5,558 2021 5,795 2022 6,201 2023 6,396 Thereafter 38,909 Total $ 66,217 |
Net Earnings Per Share
Net Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Earnings Per Share | |
Net Earnings Per Share | Note 9. Net Earnings Per Share Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti‑dilutive. The Company’s two classes of common stock, Class A and Class B Non‑Voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of December 31, 2018, we did not have any Class B Non-Voting common stock outstanding. Diluted net earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. For the years ended December 31, 2018, 2017, and 2016, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. In addition, the Company excluded 931,943, 1,085,049, and 1,005,697 shares related to restricted stock units for which the performance metric had yet to be achieved as of December 31, 2018, 2017, and 2016, respectively. The following table sets forth the reconciliation of basic and diluted net income per share: Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Basic net income per share: (in thousands, except share and per share amounts) Numerator Net income $ 510,835 $ 756,152 $ 374,925 Denominator Weighted-average common shares outstanding 104,716,301 103,189,175 102,801,161 Basic net income per share $ 4.88 $ 7.33 $ 3.65 Diluted net income per share: Numerator Net income $ 510,835 $ 756,152 $ 374,925 Assumed conversion of convertible senior notes 6,219 5,842 5,780 Net income plus assumed conversions $ 517,054 $ 761,994 $ 380,705 Denominator Number of shares used in basic computation 104,716,301 103,189,175 102,801,161 Weighted-average effect of dilutive securities 7,647,030 8,468,389 7,997,566 Number of shares used in per share computation 112,363,331 111,657,564 110,798,727 Diluted net income per share $ 4.60 $ 6.82 $ 3.44 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 10. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring and Non‑recurring Basis The Company had no assets or liabilities which were measured at fair value on a recurring or non‑recurring basis as of December 31, 2018 or 2017. Financial Instruments Not Measured at Fair Values The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of December 31, 2018 was $11.4 billion compared to a book value of $11.7 billion. The estimated fair value of debt financing as of December 31, 2017 was $10.0 billion compared to a book value of $9.8 billion. The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at December 31, 2018, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at December 31, 2018 and 2017 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock-based Compensation | |
Stock-based Compensation | Note 11. Stock‑based Compensation On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of December 31, 2018, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 5,643,135, which includes 643,135 shares which were previously reserved for issuance under the 2010 Plan. Stock Options are generally granted for a term of 10 years and generally vest over a three year period. The Company has issued RSUs with four different vesting criteria: those RSUs that vest based on the attainment of book‑value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff vest at the end of a one or two year period. The Company has two types of book value RSUs; those that vest ratably over a three year period if the performance condition has been met, and those that cliff-vest at the end of a three-year period if the performance condition has been met. For the book value RSUs that vest at the end of a three-year period, the number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the percentage change in the Company's book value per share at the end of the vesting period. At each reporting period, the Company reassesses the probability of the performance condition being achieved and a stock-based compensation expense is recognized based upon management's assessment. Book value RSUs for which the performance metric has not been met are forfeited. The TSR RSUs vest at the end of a three year period. The number of TSR RSUs that will ultimately vest is based upon the percentile ranking of the Company’s TSR among a peer group. The number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the extent to which the TSR metric is achieved. For disclosure purposes, we have assumed the TSR RSUs will ultimately vest at 100%. As of December 31, 2018, the Company had 1,055,325 unvested RSUs outstanding of which 533,187 are TSR RSUs. The Company recorded $17.5 million, $19.8 million, and $16.9 million of stock‑based compensation expense for the years ended December 31, 2018, 2017, and 2016, respectively. Stock Options The Company uses the BSM option pricing model to determine the fair value of stock options. The fair value of stock‑based payment awards on the date of grant is determined by an option‑pricing model using a number of complex and subjective variables. These variables include expected stock price volatility over the term of the awards, a risk‑free interest rate, and expected dividends. Estimated volatility of the Company’s common stock for new grants is determined by using historical volatility of the Company’s peer group. Due to our limited operating history at the time of grant, there was no historical exercise data to provide a reasonable basis which the Company could use to estimate expected terms. Accordingly, the Company used the “simplified method” as permitted under Staff Accounting Bulletin No. 110. The risk‑free interest rate used in the option valuation model was derived from U.S. Treasury zero‑coupon issues with remaining terms similar to the expected term on the options. The Company has not granted any stock options since 2011. A summary of stock option activity in accordance with the Company’s stock option plan for the year ended December 31, 2018 follows: Remaining Aggregate Exercise Contractual Term Intrinsic Value Shares Price (in years) (in thousands) (1) Balance at December 31, 2015 3,309,158 $ 20.40 4.50 $ 43,287 Granted — — — — Exercised (1,000) $ 20.00 — 14 Forfeited/canceled — — — — Balance at December 31, 2016 3,308,158 $ 20.40 3.50 $ 46,086 Granted — — — — Exercised (450,000) $ 20.59 — 9,397 Forfeited/canceled — — — — Balance at December 31, 2017 2,858,158 $ 20.37 2.49 $ 79,230 Granted — — — — Exercised (237,863) $ 20.00 — 5,505 Forfeited/canceled — — — — Balance at December 31, 2018 2,620,295 $ 20.40 1.49 $ 25,697 Vested and exercisable as of December 31, 2018 2,620,295 $ 20.40 1.49 $ 25,697 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date. As of December 31, 2018, 2017, and 2016, all of the Company’s outstanding employee stock options had fully vested and there were no unrecognized compensation costs related to outstanding employee stock options. As a result, there was no stock-based compensation expense related to Stock Options for the year ended December 31, 2018, 2017, and 2016. The following table summarizes additional information regarding outstanding, exercisable and vested stock options at December 31, 2018: Options Exercisable Options Outstanding and Vested Weighted- Weighted- Average Average Number of Remaining Life Number of Remaining Life Range of exercise prices Shares (in years) Shares (in years) $20.00 2,500,295 1.45 2,500,295 1.45 $28.80 120,000 2.32 120,000 2.32 $20.00 - $28.80 2,620,295 1.49 2,620,295 1.49 Restricted Stock Units Compensation cost for stock awards is measured at the grant date based on fair value and recognized over the vesting period. The fair value of book value and time based RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of TSR RSUs is determined at the grant date using a Monte Carlo simulation model. Included in the Monte Carlo simulation model were certain assumptions regarding a number of highly complex and subjective variables, such as expected volatility, risk‑free interest rate and expected dividends. To appropriately value the award, the risk‑free interest rate is estimated for the time period from the valuation date until the vesting date and the historical volatilities were estimated based on a historical timeframe equal to the time from the valuation date until the end date of the performance period. During the year ended December 31, 2018, the Company granted 379,480 RSUs of which 90,761 are TSR RSUs. The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2018: Unvested Restricted Stock Units Weighted ‑ Average Number of Grant ‑ Date Shares Fair Value Unvested at December 31, 2017 $ 40.24 Granted 379,480 47.26 Vested (430,788) 42.26 Forfeited/canceled (57,067) 45.41 Unvested at December 31, 2018 1,055,325 $ 41.66 Expected to vest after December 31, 2018 1,090,838 $ 41.70 At December 31, 2018, the outstanding RSUs are expected to vest as follows: 2019—437,884; 2020—321,590; and 2021—331,364. As of December 31, 2018 there was $17.1 million of unrecognized compensation cost related to unvested stock‑based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted average remaining period of 1.68 years. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments | |
Investments | Note 12. Investments The Company entered into an agreement with a co-investment vehicle arranged by Napier Park to participate in two joint ventures and formed Blackbird I and Blackbird II for the purpose of investing in commercial aircraft and leasing them to airlines around the globe. We also provide management services to these joint ventures for a fee based upon aircraft assets under management. The Company's non-controlling interests in each joint venture is 9.5% and are accounted for as investments under the equity method of accounting. As December 31, 2018, the Company's investment in the joint ventures was $40.6 million and $35.6 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018, the Company's total unfunded commitment to Blackbird II was $30.5 million. On August 1, 2018, we entered into an agreement to sell 18 aircraft to Thunderbolt II, an asset-backed securities platform which will facilitate the sale and continued management of aircraft assets to investors. The Company’s non-controlling interest in Thunderbolt II is 5.1% and it is accounted for as an investment under the cost method of accounting. All of the aircraft in Thunderbolt II's portfolio will be managed by the Company. During the year ended December 31, 2018, we completed the sale of 12 aircraft from our operating lease portfolio to Thunderbolt II. We expect the sale of the remaining six aircraft to be completed in 2019. The Company's investment in Thunderbolt II was $5.4 million as of December 31, 2018 and is recorded in Other assets on the Consolidated Balance Sheets. |
Flight Equipment Held for Sale
Flight Equipment Held for Sale | 12 Months Ended |
Dec. 31, 2018 | |
Flight Equipment held for sale | |
Flight Equipment Held for Sale | Note 13. Flight equipment held for sale As of December 31, 2018, we had six aircraft, with a carrying value of $241.6 million, which were held for sale and included in Flight equipment subject to operating leases on the Consolidated Balance Sheets. We expect the sale of all six aircraft to be completed in 2019. We cease recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2017, we did not have any flight equipment classified as held for sale. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | Note 14. Quarterly Financial Data (unaudited) The following table presents our unaudited quarterly results of operations for the two‑year period ended December 31, 2018. Quarter Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2017 2017 2017 2017 2018 2018 2018 2018 (in thousands, except per share amounts) Revenues $ 360,187 $ 380,957 $ 376,765 $ 398,471 $ 381,209 $ 397,814 $ 450,698 $ 449,981 Income before taxes 133,878 155,869 154,119 165,664 141,319 147,409 179,382 172,028 Net income 84,937 100,925 99,188 471,102 110,651 115,211 146,574 138,399 Net income per share: Basic $ 0.83 $ 0.98 $ 0.96 $ 4.56 $ 1.07 $ 1.11 $ 1.41 $ 1.29 Diluted $ 0.78 $ 0.92 $ 0.90 $ 4.22 $ 1.00 $ 1.04 $ 1.32 $ 1.24 The sum of quarterly earnings per share amounts may not equal the annual amount reported since per share amounts are computed independently for each period presented. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | Note 15. Subsequent Events On February 20, 2019, our board of directors approved a quarterly cash dividend of $0.13 per share on our outstanding common stock. The dividend will be paid on April 10, 2019 to holders of record of our common stock as of March 20, 2019. In January 2019, we issued $700.0 million in aggregate principal amount of senior unsecured notes due 2024 that bear interest at a rate of 4.250%. In February 2019, we entered into agreements to increase our revolving unsecured bank commitments by $135.0 million to $4.7 billion. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Preparation and Critical Accounting Policies | |
Principles of consolidation | Principles of consolidation The Company consolidates financial statements of all entities in which we have a controlling financial interest, including the account of any Variable Interest Entity in which we have a controlling financial interest and for which we are the primary beneficiary. All material intercompany balances are eliminated in consolidation. |
Rental of flight equipment | Rental of flight equipment The Company leases flight equipment principally under operating leases and reports rental income ratably over the life of each lease. Rentals received, but unearned, under the lease agreements are recorded in Rentals received in advance on the Company’s Consolidated Balance Sheets until earned. The difference between the rental income recorded and the cash received under the provisions of the lease is included in Lease receivables, as a component of Other assets on the Company’s Consolidated Balance Sheets. An allowance for doubtful accounts will be recognized for past‑due rentals based on management’s assessment of collectability. Management monitors all lessees with past due lease payments and discuss relevant operational and financial issues facing those lessees in order to determine an appropriate allowance for doubtful accounts. In addition, if collection is not reasonably assured, the Company will not recognize rental income for amounts due under the Company’s lease contracts and will recognize revenue for such lessees on a cash basis. All of the Company’s lease agreements are triple net leases whereby the lessee is responsible for all taxes, insurance, and aircraft maintenance. In the future, we may incur repair and maintenance expenses for off-lease aircraft. We recognize repair and maintenance expense in our Consolidated Statements of Income for all such expenditures. In many operating lease contracts, the lessee is obligated to make periodic payments, which are calculated with reference to the utilization of the airframe, engines, and other major life-limited components during the lease. In these leases, we will make a payment to the lessee to compensate the lessee for the cost of the Qualifying Event incurred, up to the maximum of the amount of Maintenance Reserves payment made by the lessee during the lease term, net of previous reimbursements. These payments are made upon the lessee’s presentation of invoices evidencing the completion of such Qualifying Event. The Company records as Rental of flight equipment revenue, the portion of Maintenance Reserves that is virtually certain will not be reimbursed to the lessee. Maintenance Reserves payments which we may be required to reimburse to the lessee are reflected in our overhaul reserve liability, as a component of Security deposits and overhaul reserves on flight equipment leases in our Consolidated Balance Sheets. Any Maintenance Reserves or end of lease payments collected that were not reimbursed to the lessee during the term of the lease for a Qualifying Event are recognized as rental revenues at the end of the lease. Leases that contain provisions which require us to pay a portion of a lessee's major maintenance based on the usage of the aircraft and major life-limited components that were incurred prior to the current lease are recorded as lease incentives based on estimated payments we expect to pay the lessee. These lease incentives are amortized as a reduction of rental revenues over the term of the lease. Lessee-specific modifications are capitalized as initial direct costs and amortized over the term of the lease into rental revenue in our Consolidated Statements of Income. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606).” The amendments in ASU 2014-09 supersede current revenue recognition requirements. The guidance specifically notes that lease contracts are a scope exception. ASU 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. Further, the guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Effective January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers (Topic 606) using the modified retrospective approach. Adopting this standard did not have a material impact to our consolidated financial statements and related disclosures. As the standard did not apply to lease contracts within the scope of FASB Accounting Standard Codification (“ASC”) 840 Leases, we evaluated the recognition of gains on sale of flight equipment under the scope of the new standard. Under ASU 2014-09, a performance obligation is satisfied, and the related revenue recognized when control of the underlying goods or services related to the performance obligation is transferred to the customer. Our performance obligation associated with the sale of flight equipment is satisfied upon delivery of the flight equipment to a customer, which is the point in time where control of the underlying flight equipment has transferred to the buyer. At the time flight equipment is retired or sold, the cost and accumulated depreciation are removed from the related accounts and the difference, net of transaction price, is recorded as a gain or loss. Since there was no net income impact upon adoption of the new guidance, a cumulative effect adjustment to opening retained earnings was not deemed necessary. |
Initial direct costs | Initial direct costs The Company records as period costs those internal and other costs incurred in connection with identifying, negotiating, and delivering aircraft to the Company's lessees. Amounts paid by us to lessees and/or other parties in connection with originating lease transactions are capitalized as lease incentives and are amortized over the lease term. Additionally, regarding the extension of leases that contain maintenance reserve provisions, the Company considers maintenance reserves that were previously recorded as revenue and no longer meet the virtual certainty criteria as a function of the extended lease term as lease incentives and capitalizes such reserves. The amortization of lease incentives are recorded as a reduction of lease revenue in the Consolidated Statements of Income. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash The Company considers cash and cash equivalents to be cash on hand and highly liquid investments with original maturity dates of 90 days or less. Restricted cash consists of pledged security deposits, maintenance reserves, and rental payments related to secured aircraft financing arrangements. The following table reconciles cash, cash equivalents and restricted cash reported in our Consolidated Balance Sheets to the total amount presented in our consolidated statement of cash flows (in thousands): December 31, December 31, 2018 2017 Cash and cash equivalents $ 300,127 $ 292,204 Restricted cash 22,871 16,078 Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 322,998 $ 308,282 |
Flight equipment | Flight equipment Flight equipment under operating lease is stated at cost less accumulated depreciation. Purchases, major additions and modifications, and interest on deposits during the construction phase are capitalized. The Company generally depreciates passenger aircraft on a straight‑line basis over a 25‑year life from the date of manufacture to a 15% residual value. Changes in the assumption of useful lives or residual values for aircraft could have a significant impact on the Company’s results of operations and financial condition. Major aircraft improvements and modifications incurred during an off-lease period are capitalized and depreciated over the remaining life of the flight equipment. In addition, costs paid by us for scheduled maintenance and overhauls are capitalized and depreciated over a period to the next scheduled maintenance or overhaul event. Miscellaneous repairs are expensed when incurred. Management evaluates on a quarterly basis the need to perform an impairment test whenever facts or circumstances indicate a potential impairment has occurred. An assessment is performed whenever events or changes in circumstances indicate that the carrying amount of an aircraft may not be recoverable. Recoverability of an aircraft’s carrying amount is measured by comparing the carrying amount of the aircraft to future undiscounted net cash flows expected to be generated by the aircraft. The undiscounted cash flows consist of cash flows from currently contracted leases, future projected lease rates, and estimated residual or scrap values for each aircraft. We develop assumptions used in the recoverability analysis based on our knowledge of active lease contracts, current and future expectations of the global demand for a particular aircraft type, and historical experience in the aircraft leasing market and aviation industry, as well as information received from third‑party industry sources. The factors considered in estimating the undiscounted cash flows are affected by changes in future periods due to changes in contracted lease rates, economic conditions, technology, and airline demand for a particular aircraft type. In the event that an aircraft does not meet the recoverability test, the aircraft will be recorded at fair value in accordance with the Company’s Fair Value Policy, resulting in an impairment charge. Our Fair Value Policy is described below under “Fair Value Measurements”. |
Maintenance Rights | Maintenance Rights The Company identifies, measures, and accounts for maintenance right assets and liabilities associated with its acquisitions of aircraft with in-place leases. A maintenance right asset represents the fair value of the Company’s contractual right under a lease to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents the Company’s obligation to pay the lessee for the difference between the lease end contractual maintenance condition of the aircraft and the actual maintenance condition of the aircraft on the acquisition date. The Company’s aircraft are typically subject to triple-net leases pursuant to which the lessee is responsible for maintenance, which is accomplished through one of two types of provisions in its leases: (i) end of lease return conditions (“EOL Leases”) or (ii) periodic maintenance payments (“MR Leases”). (i) EOL Leases Under EOL Leases, the lessee is obligated to comply with certain return conditions which require the lessee to perform maintenance on the aircraft or make cash compensation payments at the end of the lease to bring the aircraft into a specified maintenance condition. Maintenance right assets in EOL Leases represent the difference in value between the contractual right to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. Maintenance right liabilities exist in EOL Leases if, on the acquisition date, the maintenance condition of the aircraft is greater than the contractual return condition in the lease and the Company is required to pay the lessee in cash for the improved maintenance condition. Maintenance right assets, net of accumulated amortization, are recorded as a component of Flight equipment subject to operating leases on the Consolidated Balance Sheets. When the Company has recorded maintenance right assets with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment to the Company by the lessee, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent the improvement is substantiated and deemed to meet the Company’s capitalization policy; (ii) the lessee pays the Company cash compensation at lease expiry in excess of the value of the maintenance right asset, the maintenance right asset is relieved, and any excess is recognized as end of lease income; or (iii) the lessee pays the Company cash compensation at lease expiry that is less than the value of the maintenance right asset, the cash is applied to the maintenance right asset, and the balance of such asset is relieved and recorded as an aircraft improvement to the extent the improvement is substantiated and meets the Company’s capitalization policy. Any aircraft improvement will be depreciated over a period to the next scheduled maintenance event in accordance with the Company’s policy with respect to major maintenance and included in Depreciation of flight equipment on the Company’s Consolidated Statements of Income. When the Company has recorded maintenance right liabilities with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment by the Company to the lessee, the maintenance right liability is relieved, and end of lease income is recognized; (ii) the Company pays the lessee cash compensation at lease expiry of less than the value of the maintenance right liability, the maintenance right liability is relieved, and any difference is recognized as end of lease income; or (iii) the Company pays the lessee cash compensation at lease expiry in excess of the value of the maintenance right liability, the maintenance right liability is relieved, and the excess amount is recorded as an aircraft improvement to the extent of that it meets our capitalization policy. (ii) MR Leases Under MR Leases, the lessee is required to make periodic payments to us for maintenance based upon planned usage of the aircraft. When a Qualifying Event occurs during the lease term, the Company is required to reimburse the lessee for the costs associated with such an event. At the end of lease, the Company is entitled to retain any cash receipts in excess of the required reimbursements to the lessee. Maintenance right assets in MR Leases represent the right to receive an aircraft in an improved condition relative to the actual condition on the acquisition date. The aircraft is improved by the performance of a Qualifying Event paid for by the lessee who is reimbursed by the Company from the periodic maintenance payments that it receives. Maintenance right assets, net of accumulated amortization, are recorded as a component of Flight equipment subject to operating leases on the Consolidated Balance Sheets. When the Company has recorded maintenance right assets with respect to MR Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry and no Qualifying Event has been performed by the lessee since the acquisition date, the maintenance right asset is offset by the amount of the associated maintenance payment liability, and any excess is recorded as end of lease income; or (ii) the Company has reimbursed the lessee for the performance of a Qualifying Event, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent of that it meets our capitalization policy. There are no maintenance right liabilities for MR Leases. When flight equipment is sold, maintenance rights are included in the calculation of the disposition gain or loss. For the year ended December 31, 2018, the Company purchased nine aircraft in the secondary market, two of which were subject to existing leases. The total cost for the two aircraft was $73.3 million, which included maintenance right assets of $13.2 million. For the year ended December 31, 2017, the Company did not purchase any aircraft in the secondary market subject to an existing lease. As of December 31, 2018 and 2017, the Company had maintenance right assets, net of accumulated amortization of $46.4 million and $44.6 million, respectively. Maintenance right assets are included under Flight equipment subject to operating leases in our Consolidated Balance Sheets. |
Flight equipment held for sale | Flight equipment held for sale Management evaluates all contemplated aircraft sale transactions to determine whether all the required criteria have been met under Generally Accepted Accounting Principles (“GAAP”) to classify aircraft as flight equipment held for sale. Management uses judgment in evaluating these criteria. Due to the significant uncertainties of potential sale transactions, the held for sale criteria generally will not be met unless the aircraft is subject to a signed sale agreement, or management has made a specific determination and obtained appropriate approvals to sell a particular aircraft or group of aircraft. Aircraft classified as flight equipment held for sale are recognized at the lower of their carrying amount or estimated fair value less estimated costs to sell. At the time aircraft are classified as flight equipment held for sale, depreciation expense is no longer recognized. |
Capitalized interest | Capitalized interest The Company may borrow funds to finance deposits on new flight equipment purchases. The Company capitalizes interest expense on such borrowings. The capitalized amount is calculated using our composite borrowing rate and is recorded as an increase to the cost of the flight equipment on our Consolidated Balance Sheets at the time of purchase. |
Fair value measurements | Fair value measurements Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures the fair value of certain assets on a non-recurring basis, principally our flight equipment, when GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable. The Company records flight equipment at fair value when we determine the carrying value may not be recoverable. The Company principally uses the income approach to measure the fair value of flight equipment. The income approach is based on the present value of cash flows from contractual lease agreements and projected future lease payments, including contingent rentals, net of expenses, which extend to the end of the aircraft’s economic life in its highest and best use configuration, as well as a disposition value based on expectations of market participants. These valuations are considered Level 3 valuations, as the valuations contain significant non‑observable inputs. |
Income taxes | Income taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets when the probability of realization of the full value of the asset is less than 50%. The Company recognizes the impact of a tax position, if that position is more than 50% likely to be sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes interest and penalties for uncertain tax positions in income tax expense. |
Deferred costs | Deferred costs The Company incurs debt issuance costs in connection with debt financings. Those costs are deferred and amortized over the life of the specific loan using the effective interest method and charged to interest expense. The Company also incurs costs in connection with equity offerings. Such costs are deferred until the equity offering is completed and either netted against the equity raised, or expensed if the equity offering is abandoned. |
Investments | Investments Our investment in the Blackbird Capital I, LLC (“Blackbird I”) and Blackbird Capital II, LLC (“Blackbird II”) joint ventures, where we own 9.5% of the equity of each venture, is accounted for using the equity method of accounting due to our level of influence and involvement in the joint ventures. The investments are recorded at the amount invested plus or minus our 9.5% share of net income or loss, less any distributions or return of capital received from the entities. Our investment in Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”), where we own 5.1%, is accounted for using the cost method of accounting. The investment is recorded at the amount invested less any return of capital received from the entity. |
Stock-based compensation | Stock ‑ based compensation Stock‑based compensation cost is measured at the grant date based on the fair value of the award. Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made in the prior years' consolidated financial statements to conform to the classifications in 2018. |
Recent issued accounting pronouncements | Recently adopted accounting standards In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), “Statement of Cash Flows (Topic 230).” The amendments in ASU 2016-15 address eight classification issues related to the statement of cash flows. The Company adopted ASU 2016-15 using the retrospective transition method. The adoption of this standard did not have an impact on the current period or prior period consolidated financial statements. In November 2016, FASB issued ASU No. 2016-18 (“ASU 2016-18”), “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires entities to present the aggregate changes in cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. In addition, when cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, ASU 2016-18 requires a reconciliation of the totals in the statement of cash flows to the related captions on the balance sheet. The Company adopted ASU 2016-18 retrospectively as of January 1, 2018. The adoption of this standard did not have a material impact on the current period or prior period consolidated financial statements. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842)”. The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases”, which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In addition, in August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842”, which includes an option to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than restate comparative periods in transition. In December 2018, the FASB issued ASU 2018-20, “Narrow-Scope Improvements for Lessors”. This ASU provides an election for lessors to exclude sales and related taxes from consideration in the contract and requires lessors to exclude from revenue and expense lessor costs paid directly to a third party by lessees. The standards will be effective for annual reporting periods beginning after December 15, 2018 for public entities and is required to be applied using the modified retrospective transition approach. The Company will adopt the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company will continue to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, we noted that Lessor accounting is similar to the current model, but the guidance will impact us in scenarios where we are the Lessee. The Company currently expects to recognize operating lease right-of-use assets and operating lease liabilities on our Consolidated Balance Sheets in the amounts of approximately $44.9 million and approximately $51.4 million, respectively. We do not expect the impact of this standard to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. ASU 2016-13 affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses”. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The Company is evaluating the potential effects on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Preparation and Critical Accounting Policies | |
Schedule of cash and cash equivalents and restricted cash | The following table reconciles cash, cash equivalents and restricted cash reported in our Consolidated Balance Sheets to the total amount presented in our consolidated statement of cash flows (in thousands): December 31, December 31, 2018 2017 Cash and cash equivalents $ 300,127 $ 292,204 Restricted cash 22,871 16,078 Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 322,998 $ 308,282 |
Debt Financing (Tables)
Debt Financing (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Financing | |
Summary of consolidated debt | December 31, December 31, 2018 2017 (in thousands) Unsecured Senior notes $ 10,043,445 $ 8,019,871 Term financings 607,340 203,704 Revolving credit facility 602,000 847,000 Convertible senior notes — 199,983 Total unsecured debt financing 11,252,785 9,270,558 Secured Term financings 371,203 484,036 Export credit financing 38,265 44,920 Total secured debt financing 409,468 528,956 Total debt financing 11,662,253 9,799,514 Less: Debt discounts and issuance costs (123,348) (100,729) Debt financing, net of discounts and issuance costs $ 11,538,905 $ 9,698,785 |
Schedule of secured obligations | December 31, December 31, 2018 2017 (in thousands, except for number of aircraft) Nonrecourse $ 167,245 $ 205,906 Recourse 242,223 323,050 Total $ 409,468 $ 528,956 Number of aircraft pledged as collateral 20 21 Net book value of aircraft pledged as collateral $ 1,132,111 $ 1,184,264 |
Schedule of maturities of debt outstanding | Years ending December 31, (in thousands) 2019 $ 1,083,726 2020 1,220,454 2021 1,685,961 2022 3,071,445 2023 1,870,676 Thereafter 2,729,991 Total $ 11,662,253 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Interest Expense | |
Schedule of components of interest | Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 (in thousands) Interest on borrowings $ 362,843 $ 303,966 $ 296,142 Less capitalized interest (52,817) (46,049) (40,883) Interest 310,026 257,917 255,259 Amortization of discounts and deferred debt issue costs 32,706 29,454 30,942 Interest expense $ 342,732 $ 287,371 $ 286,201 |
Rental Income (Tables)
Rental Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Rental Income | |
Schedule of minimum future rentals on non-cancellable operating leases of flight equipment | Years ending December 31, (in thousands) 2019 $ 1,742,589 2020 1,689,333 2021 1,587,150 2022 1,455,673 2023 1,270,209 Thereafter 4,030,672 Total $ 11,775,626 |
Schedule of lease terminations by aircraft type for operating lease portfolio | Aircraft Type 2019 2020 2021 2022 2023 Thereafter Total Airbus A319-100 — — 1 — — — 1 Airbus A320-200 — 8 3 3 6 15 35 Airbus A320-200neo — — — — — 6 6 Airbus A321-200 — 2 1 1 8 22 34 Airbus A321-200neo — 1 1 — — 12 14 Airbus A330-200 2 — 1 2 3 7 15 Airbus A330-300 — — — 2 1 2 5 Airbus A330-900neo — — — — — 1 1 Airbus A350-900 — — — — — 6 6 Boeing 737-700 1 — 1 — 2 — 4 Boeing 737-800 2 3 9 11 13 60 98 Boeing 737-8 MAX — — — — — 14 14 Boeing 777-200ER — — — 1 — — 1 Boeing 777-300ER — — 3 4 4 13 24 Boeing 787-9 — — — — — 15 15 Embraer E190 — 1 — — — — 1 Total 5 15 20 24 37 173 274 |
Concentration of Risk (Tables)
Concentration of Risk (Tables) - Geographic Region | 12 Months Ended |
Dec. 31, 2018 | |
Net book value of aircraft portfolio | |
Concentration of risk | |
Schedule of concentration of risk by regions | December 31, 2018 December 31, 2017 Net Book Net Book Region Value (1) % of Total Value (1) % of Total (in thousands, except percentages) Europe $ 4,692,341 29.9 % $ 4,205,431 31.7 % Asia (excluding China) 3,846,785 24.5 % 2,981,339 22.4 % China 2,663,903 17.0 % 2,720,124 20.5 % The Middle East and Africa 1,952,900 12.4 % 1,481,825 11.2 % Central America, South America, and Mexico 1,078,900 6.9 % 926,732 7.0 % U.S. and Canada 757,884 4.8 % 599,367 4.5 % Pacific, Australia, and New Zealand 714,397 4.5 % 365,432 2.7 % Total $ 15,707,110 100.0 % $ 13,280,250 100.0 % (1) As of December 31, 2018, we had six aircraft held for sale. We did not have any aircraft held for sale as of December 31, 2017. |
Number of customers | |
Concentration of risk | |
Schedule of concentration of risk by regions | December 31, 2018 December 31, 2017 Number of Number of Region Customers (1) % of Total Customers (1) % of Total Europe 33 35.1 % 31 34.0 % Asia (excluding China) 18 19.1 % 18 19.8 % The Middle East and Africa 11 11.8 % 11 12.1 % U.S. and Canada 10 10.6 % 11 12.1 % Central America, South America, and Mexico 10 10.6 % 9 9.9 % China 9 9.6 % 9 9.9 % Pacific, Australia, and New Zealand 3 3.2 % 2 2.2 % Total 94 100.0 % 91 100.0 % (1) A customer is an airline with its own operating certificate. |
Flight equipment revenue | |
Concentration of risk | |
Schedule of rental revenue and percentage of rental flight equipment revenues | Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Amount of Amount of Amount of Rental Rental Rental Region Revenue % of Total Revenue % of Total Revenue % of Total (in thousands, except percentages) Europe $ 476,515 29.2 % $ 450,628 31.1 % $ 400,491 29.9 % Asia (excluding China) 412,465 25.3 % 332,284 22.9 % 308,658 23.1 % China 329,977 20.2 % 324,147 22.3 % 293,206 21.9 % The Middle East and Africa 179,497 11.0 % 116,799 8.1 % 106,300 7.9 % Central America, South America, and Mexico 108,736 6.7 % 102,205 7.0 % 112,068 8.4 % U.S. and Canada 77,678 4.8 % 76,685 5.3 % 69,918 5.2 % Pacific, Australia, and New Zealand 46,332 2.8 % 47,987 3.3 % 48,361 3.6 % Total $ 1,631,200 100.0 % $ 1,450,735 100.0 % $ 1,339,002 100.0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of provision for income taxes | Year Ended December 31, 2018 2017 2016 (in thousands) Current: Federal $ — $ — $ — State 492 380 30 Foreign 2,839 3,853 848 Deferred: Federal 125,160 (150,850) 203,882 State 812 (5) 553 Foreign — — — Provision for income taxes $ 129,303 $ (146,622) $ 205,313 |
Schedule of differences between the provision for income taxes and income taxes at the statutory federal income tax rate | Year Ended December 31, 2018 2017 2016 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Income taxes at statutory federal rate $ 134,429 21.0 % $ 213,336 35.0 % $ 203,083 35.0 % Impact of tax legislation — — (354,127) (58.1) — — Foreign tax credit (9,600) (1.5) (10,873) (1.8) — — State income taxes, net of federal income tax effect and other 4,474 0.7 5,042 0.9 2,230 0.4 Provision for income taxes $ 129,303 20.2 % $ (146,622) (24.0) % $ 205,313 35.4 % |
Schedule of net deferred tax assets (liabilities) | December 31, December 31, 2018 2017 (in thousands) Assets (Liabilities) Equity compensation $ 11,951 $ 12,744 Net operating losses 17 10,143 Foreign tax credit 2,425 14,577 Rents received in advance 25,165 22,076 Accrued bonus 2,825 1,777 Straight-line rents (320) (1,967) Other 1,972 1,912 Aircraft depreciation (687,802) (579,057) Net deferred tax assets/(liabilities) $ (643,767) $ (517,795) |
Schedule of expire of company's loss and tax credit carryforwards | NOL Tax Credit Carryforwards Carryforwards (in thousands) 2019-2023 $ — $ — Thereafter 244 2,425 Total carryforwards $ 244 $ 2,425 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Schedule of commitments to acquire aircraft | Aircraft Type 2019 2020 2021 2022 2023 Thereafter Total Airbus A320/321neo (1) 25 40 22 25 25 — 137 Airbus A330-900neo 9 2 5 6 2 — 24 Airbus A350-900/1000 4 3 6 3 2 — 18 Boeing 737-7/8/9 MAX 28 28 34 34 25 5 154 Boeing 787-9/10 12 10 8 9 — — 39 Total (2) 78 83 75 77 54 5 372 (1) Our Airbus A320/321neo aircraft orders include 57 long-range variants. (2) In addition to the aircraft from our orderbook, we have a commitment to purchase two used Airbus A330-300 aircraft from a third party, which are scheduled for delivery in 2019. |
Schedule of commitments for the acquisition of aircraft and other equipment at an estimated aggregate purchase price | Years ending December 31, (in thousands) 2019 $ 6,128,796 2020 6,065,522 2021 5,733,510 2022 5,243,482 2023 2,896,500 Thereafter 221,130 Total $ 26,288,940 |
Schedule of commitments for minimum rentals under the non-cancelable lease term | Years ending December 31, (in thousands) 2019 $ 3,358 2020 5,558 2021 5,795 2022 6,201 2023 6,396 Thereafter 38,909 Total $ 66,217 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Earnings Per Share | |
Schedule of reconciliation of basic and diluted net income per share | Year Ended Year Ended Year Ended December 31, 2018 December 31, 2017 December 31, 2016 Basic net income per share: (in thousands, except share and per share amounts) Numerator Net income $ 510,835 $ 756,152 $ 374,925 Denominator Weighted-average common shares outstanding 104,716,301 103,189,175 102,801,161 Basic net income per share $ 4.88 $ 7.33 $ 3.65 Diluted net income per share: Numerator Net income $ 510,835 $ 756,152 $ 374,925 Assumed conversion of convertible senior notes 6,219 5,842 5,780 Net income plus assumed conversions $ 517,054 $ 761,994 $ 380,705 Denominator Number of shares used in basic computation 104,716,301 103,189,175 102,801,161 Weighted-average effect of dilutive securities 7,647,030 8,468,389 7,997,566 Number of shares used in per share computation 112,363,331 111,657,564 110,798,727 Diluted net income per share $ 4.60 $ 6.82 $ 3.44 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock-based Compensation | |
Summary of stock option activity | Remaining Aggregate Exercise Contractual Term Intrinsic Value Shares Price (in years) (in thousands) (1) Balance at December 31, 2015 3,309,158 $ 20.40 4.50 $ 43,287 Granted — — — — Exercised (1,000) $ 20.00 — 14 Forfeited/canceled — — — — Balance at December 31, 2016 3,308,158 $ 20.40 3.50 $ 46,086 Granted — — — — Exercised (450,000) $ 20.59 — 9,397 Forfeited/canceled — — — — Balance at December 31, 2017 2,858,158 $ 20.37 2.49 $ 79,230 Granted — — — — Exercised (237,863) $ 20.00 — 5,505 Forfeited/canceled — — — — Balance at December 31, 2018 2,620,295 $ 20.40 1.49 $ 25,697 Vested and exercisable as of December 31, 2018 2,620,295 $ 20.40 1.49 $ 25,697 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date. |
Summary of additional information regarding exercisable and vested stock options | Options Exercisable Options Outstanding and Vested Weighted- Weighted- Average Average Number of Remaining Life Number of Remaining Life Range of exercise prices Shares (in years) Shares (in years) $20.00 2,500,295 1.45 2,500,295 1.45 $28.80 120,000 2.32 120,000 2.32 $20.00 - $28.80 2,620,295 1.49 2,620,295 1.49 |
Summary of activities for unvested RSUs | Unvested Restricted Stock Units Weighted ‑ Average Number of Grant ‑ Date Shares Fair Value Unvested at December 31, 2017 $ 40.24 Granted 379,480 47.26 Vested (430,788) 42.26 Forfeited/canceled (57,067) 45.41 Unvested at December 31, 2018 1,055,325 $ 41.66 Expected to vest after December 31, 2018 1,090,838 $ 41.70 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data (unaudited) | |
Schedule of unaudited quarterly results of operations | Quarter Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2017 2017 2017 2017 2018 2018 2018 2018 (in thousands, except per share amounts) Revenues $ 360,187 $ 380,957 $ 376,765 $ 398,471 $ 381,209 $ 397,814 $ 450,698 $ 449,981 Income before taxes 133,878 155,869 154,119 165,664 141,319 147,409 179,382 172,028 Net income 84,937 100,925 99,188 471,102 110,651 115,211 146,574 138,399 Net income per share: Basic $ 0.83 $ 0.98 $ 0.96 $ 4.56 $ 1.07 $ 1.11 $ 1.41 $ 1.29 Diluted $ 0.78 $ 0.92 $ 0.90 $ 4.22 $ 1.00 $ 1.04 $ 1.32 $ 1.24 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($)aircraft | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 01, 2018 | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies | |||||
Number of aircraft owned | aircraft | 275 | ||||
Number of aircraft on order with manufacturers | aircraft | 372 | ||||
Number of aircraft purchase options with manufacturers | aircraft | 50 | ||||
Cash, cash equivalents and restricted cash | |||||
Cash and cash equivalents | $ 300,127 | $ 292,204 | |||
Restricted cash | 22,871 | 16,078 | |||
Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows | $ 322,998 | 308,282 | $ 290,802 | $ 173,203 | |
Flight equipment | |||||
Useful life | 25 years | ||||
Residual value (as a percent) | 15.00% | ||||
Maintenance Rights | |||||
Maintenance right liabilities | $ 0 | ||||
Accumulated depreciation | 2,278,214 | 1,819,790 | |||
Total cost | 17,985,324 | 15,100,040 | |||
Payments for Flight Equipment | $ 976,101 | 773,981 | $ 868,091 | ||
Income taxes | |||||
Probability threshold of realization of full value of the asset for recording of valuation allowance for deferred tax assets (as a percent) | 50.00% | ||||
Blackbird Capital I | |||||
Investments | |||||
Percentage of equity ownership | 9.50% | ||||
Blackbird Capital II | |||||
Investments | |||||
Percentage of equity ownership | 9.50% | ||||
Thunderbolt II | |||||
Investments | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 5.10% | 5.10% | |||
Subject to existing lease | |||||
Maintenance Rights | |||||
Number of aircraft purchased | aircraft | 2 | ||||
Total cost | $ 73,300 | ||||
Maintenance Right Assets | |||||
Maintenance Rights | |||||
Accumulated depreciation | 46,400 | $ 44,600 | |||
Maintenance Right Assets | Subject to existing lease | |||||
Maintenance Rights | |||||
Total cost | $ 13,200 | ||||
Aircraft Improvement Assets | |||||
Maintenance Rights | |||||
Number of aircraft purchased | aircraft | 9 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018item | Jan. 01, 2019USD ($) | |
ASU 2016-15 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of classification issues | item | 8 | |
Forecast | ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 44.9 | |
Operating lease liabilities | $ 51.4 |
Debt Financing (Details)
Debt Financing (Details) | Feb. 01, 2019USD ($) | May 31, 2018USD ($) | Mar. 31, 2013USD ($)aircraft | Nov. 30, 2011USD ($)shares | Dec. 31, 2018USD ($)itemaircraft$ / sharesshares | Dec. 31, 2017USD ($)aircraft | Nov. 30, 2018USD ($) | Oct. 23, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 31, 2018USD ($) |
Debt financing | ||||||||||||
Total debt financing | $ 11,662,253,000 | $ 9,799,514,000 | ||||||||||
Less: Debt discounts and issuance costs | (123,348,000) | (100,729,000) | ||||||||||
Debt financing, net of discounts and issuance costs | 11,538,905,000 | 9,698,785,000 | ||||||||||
Secured Obligations | ||||||||||||
Number of Boeing aircraft purchase price refinanced with the proceeds of debt | aircraft | 2 | |||||||||||
Unsecured Debt | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | 11,252,785,000 | 9,270,558,000 | ||||||||||
Senior Notes | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 10,043,445,000 | $ 8,019,871,000 | ||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 1,200,000,000 | $ 1,250,000,000 | ||||||||||
Senior Notes | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 1.125% | |||||||||||
Senior Notes | Minimum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 2.125% | 2.125% | ||||||||||
Remaining term (in years) | 1 month 6 days | |||||||||||
Senior Notes | Maximum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 7.375% | 7.375% | ||||||||||
Remaining term (in years) | 9 years 9 months 18 days | |||||||||||
Senior Unsecured Notes Maturing 2021 and 2028 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 2,950,000,000 | |||||||||||
Senior Unsecured Notes Maturing 2021 and 2028 | Minimum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 2.50% | |||||||||||
Senior Unsecured Notes Maturing 2021 and 2028 | Maximum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 4.625% | |||||||||||
Senior Unsecured Notes 3.5 Percent Due 2022 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 700,000,000 | |||||||||||
Interest rate (as a percent) | 3.50% | |||||||||||
Senior Unsecured Notes 3.875 Percent Due 2023 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 500,000,000 | |||||||||||
Interest rate (as a percent) | 3.875% | |||||||||||
Senior Unsecured Notes 2.50 Percent Due 2021 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 550,000,000 | |||||||||||
Interest rate (as a percent) | 2.50% | |||||||||||
Senior Unsecured Notes 3.25 Percent Due 2025 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 700,000,000 | |||||||||||
Interest rate (as a percent) | 3.25% | |||||||||||
Senior Unsecured Notes 4.625 Percent Due 2028 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 500,000,000 | |||||||||||
Interest rate (as a percent) | 4.625% | |||||||||||
Senior Unsecured Notes 1.125 Percent Due 2022 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 75,000,000 | |||||||||||
Interest rate (as a percent) | 1.125% | |||||||||||
Medium Term Note Program | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 15,000,000 | |||||||||||
Medium Term Note Program 4.25 Percent Due 2024 | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 700,000,000 | |||||||||||
Interest rate (as a percent) | 4.25% | |||||||||||
Unsecured Term financings | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 607,340,000 | $ 203,704,000 | ||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 553,000,000 | |||||||||||
Interest rate (as a percent) | 3.50% | |||||||||||
Number of additional term facilities entered into | item | 3 | |||||||||||
Unsecured Term financings | Minimum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 2.75% | |||||||||||
Remaining term (in years) | 1 month 6 days | |||||||||||
Unsecured Term financings | Minimum | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 0.95% | |||||||||||
Unsecured Term financings | Maximum | ||||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 3.50% | |||||||||||
Remaining term (in years) | 4 years 6 months | |||||||||||
Unsecured Term financings | Maximum | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 1.125% | |||||||||||
Unsecured Term Financing 1.125 Percent | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 518,000,000 | |||||||||||
Debt term | 4 years | |||||||||||
Interest margin (as a percent) | 1.125% | |||||||||||
Unsecured Term Financing 1.125 Percent | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 1.125% | |||||||||||
Unsecured Term Financing 0.950 Percent | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 20,000,000 | |||||||||||
Debt term | 4 years | |||||||||||
Interest margin (as a percent) | 0.95% | |||||||||||
Unsecured Term Financing 0.950 Percent | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 0.95% | |||||||||||
Unsecured Term Financing 3.50 Percent | ||||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 15,000,000 | |||||||||||
Interest rate (as a percent) | 3.50% | |||||||||||
Debt term | 5 years | |||||||||||
Revolving Credit Facility | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 602,000,000 | 847,000,000 | ||||||||||
Secured Obligations | ||||||||||||
Maximum borrowing capacity | $ 4,700,000,000 | $ 4,100,000,000 | ||||||||||
Incremental borrowing capacity | $ 300,000,000 | |||||||||||
Incremental borrowing capacity increase percentage | 135.00% | |||||||||||
Unsecured Revolving Credit Facility Maturing on May 5, 2019 | ||||||||||||
Secured Obligations | ||||||||||||
Maximum borrowing capacity | $ 4,100,000,000 | |||||||||||
Revolving commitments held by lenders | $ 275,000,000 | |||||||||||
Debt term | 4 years | |||||||||||
Unsecured Revolving Credit Facility Maturing on May 5, 2020 | ||||||||||||
Secured Obligations | ||||||||||||
Revolving commitments held by lenders | $ 93,000,000 | |||||||||||
Unsecured Revolving Credit Facility Mature On 5 May 2021 | ||||||||||||
Secured Obligations | ||||||||||||
Revolving commitments held by lenders | 20,000,000 | |||||||||||
Unsecured Revolving Credit Facility Mature On 5 May 2022 | ||||||||||||
Secured Obligations | ||||||||||||
Maximum borrowing capacity | 4,500,000,000 | $ 4,600,000,000 | ||||||||||
Incremental borrowing capacity | $ 50,000,000 | |||||||||||
Revolving commitments held by lenders | $ 4,200,000,000 | |||||||||||
Unsecured Revolving Credit Facility Mature On 5 May 2022 | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 1.05% | |||||||||||
Facility fee | 0.20% | |||||||||||
Convertible Senior Notes | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 151,000 | 199,983,000 | ||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 200,000,000 | |||||||||||
Interest rate (as a percent) | 3.875% | |||||||||||
Convertible Senior Notes | Class A Common Stock | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | 151,000 | |||||||||||
Secured Obligations | ||||||||||||
Conversion of convertible notes to Class A Common Stock | $ 199,800,000 | $ 199,800,000 | ||||||||||
Share price on conversion (in dollars per share) | $ / shares | $ 29.22 | |||||||||||
Issuance of shares on conversion | shares | 6,838,546 | 6,838,546 | ||||||||||
Secured Debt | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 409,468,000 | 528,956,000 | ||||||||||
Secured Obligations | ||||||||||||
Nonrecourse | 167,245,000 | 205,906,000 | ||||||||||
Recourse | 242,223,000 | 323,050,000 | ||||||||||
Total secured debt financing | $ 409,468,000 | $ 528,956,000 | ||||||||||
Number of aircraft pledged as collateral | aircraft | 20 | 21 | ||||||||||
Net book value of aircraft pledged as collateral | $ 1,132,111,000 | $ 1,184,264,000 | ||||||||||
Secured Term Financings | Minimum | ||||||||||||
Secured Obligations | ||||||||||||
Remaining term (in years) | 1 month 6 days | |||||||||||
Secured Term Financings | Maximum | ||||||||||||
Secured Obligations | ||||||||||||
Remaining term (in years) | 4 years 6 months | |||||||||||
Secured Term Financing Including Warehouse Facility | ||||||||||||
Secured Obligations | ||||||||||||
Number of aircraft pledged as collateral | aircraft | 19 | |||||||||||
Net book value of aircraft pledged as collateral | $ 1,100,000,000 | |||||||||||
Export Credit Financing | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 38,265,000 | 44,920,000 | ||||||||||
Secured Obligations | ||||||||||||
Principal amount issued | $ 76,500,000 | |||||||||||
Interest rate (as a percent) | 1.617% | |||||||||||
Term Financings | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 371,203,000 | 484,036,000 | ||||||||||
Secured Obligations | ||||||||||||
Number of aircraft pledged as collateral | item | 18 | |||||||||||
Net book value of aircraft pledged as collateral | $ 1,100,000,000 | |||||||||||
Fixed rate debt | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 500,000 | $ 2,600,000 | ||||||||||
Secured Obligations | ||||||||||||
Interest rate (as a percent) | 4.58% | 4.58% | ||||||||||
Floating rate debt | ||||||||||||
Debt financing | ||||||||||||
Total debt financing | $ 370,700,000 | $ 481,500,000 | ||||||||||
Floating rate debt | Minimum | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 1.15% | 1.15% | ||||||||||
Floating rate debt | Maximum | LIBOR | ||||||||||||
Secured Obligations | ||||||||||||
Interest margin (as a percent) | 2.99% | 2.99% |
Debt Financing - Maturities of
Debt Financing - Maturities of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Maturities | ||
2,019 | $ 1,083,726 | |
2,020 | 1,220,454 | |
2,021 | 1,685,961 | |
2,022 | 3,071,445 | |
2,023 | 1,870,676 | |
Thereafter | 2,729,991 | |
Total | $ 11,662,253 | $ 9,799,514 |
Interest Expense (Details)
Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest Expense | |||
Interest on borrowings | $ 362,843 | $ 303,966 | $ 296,142 |
Less capitalized interest | (52,817) | (46,049) | (40,883) |
Interest | 310,026 | 257,917 | 255,259 |
Amortization of debt discounts and issuance costs | 32,706 | 29,454 | 30,942 |
Interest expense | $ 342,732 | $ 287,371 | $ 286,201 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Mar. 09, 2017shares | Jun. 04, 2010USD ($)item$ / sharesshares | Nov. 30, 2011USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2010$ / sharesshares |
Shareholders' equity | |||||||
Cash consideration of issuance of common stock | $ | $ 4,826,000 | $ 9,264,000 | $ 20,000 | ||||
Warrants | |||||||
Warrants issued (in shares) | 482,625 | ||||||
Number of institutional investors | item | 2 | ||||||
Exercisable period of warrants | 7 years | ||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 20 | ||||||
Grant date fair value | $ | $ 5,600,000 | ||||||
Number of warrants exercised | 268,125 | ||||||
Warrants outstanding | 0 | 0 | |||||
Preferred stock | |||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Preferred Stock, shares issued | 0 | 0 | |||||
Preferred Stock, shares outstanding | 0 | 0 | |||||
Secured Obligations | |||||||
Remaining aggregate outstanding principal amount | $ | $ 11,662,253,000 | $ 9,799,514,000 | |||||
Unsecured Debt | |||||||
Secured Obligations | |||||||
Remaining aggregate outstanding principal amount | $ | $ 11,252,785,000 | 9,270,558,000 | |||||
Convertible Senior Notes | |||||||
Secured Obligations | |||||||
Principal amount issued | $ | $ 200,000,000 | ||||||
Interest rate (as a percent) | 3.875% | ||||||
Remaining aggregate outstanding principal amount | $ | $ 151,000 | $ 199,983,000 | |||||
Class A Common Stock | |||||||
Shareholders' equity | |||||||
Common Stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common stock, shares issued | 110,949,850 | 103,621,629 | |||||
Common stock, shares outstanding | 110,949,850 | 103,621,629 | |||||
Warrants | |||||||
Issuance of shares upon exercise of warrants | 131,001 | 482,625 | |||||
Class A Common Stock | Convertible Senior Notes | |||||||
Secured Obligations | |||||||
Conversion of convertible notes to Class A Common Stock | $ | $ 199,800,000 | $ 199,800,000 | |||||
Share price on conversion (in dollars per share) | $ / shares | $ 29.22 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 6,838,546 | 6,838,546 | |||||
Remaining aggregate outstanding principal amount | $ | $ 151,000 | ||||||
Class A Common Stock | Convertible Senior Notes | Weighted average | |||||||
Secured Obligations | |||||||
Share price on conversion (in dollars per share) | $ / shares | $ 29.22 | ||||||
Class B Non-Voting Common Stock | |||||||
Shareholders' equity | |||||||
Common Stock, authorized shares | 10,000,000 | 10,000,000 | |||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Common stock, shares issued | 0 | 0 | |||||
Common stock, shares outstanding | 0 | 0 |
Rental Income (Details)
Rental Income (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)aircraft | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2019 | $ | $ 1,742,589 | ||
2020 | $ | 1,689,333 | ||
2021 | $ | 1,587,150 | ||
2022 | $ | 1,455,673 | ||
2023 | $ | 1,270,209 | ||
Thereafter | $ | 4,030,672 | ||
Total | $ | 11,775,626 | ||
Maintenance reserve revenue | $ | $ 24,900 | $ 40,900 | $ 29,000 |
Number of aircraft currently off lease | 1 | ||
2,019 | 5 | ||
2,020 | 15 | ||
2,021 | 20 | ||
2,022 | 24 | ||
2,023 | 37 | ||
Thereafter | 173 | ||
Total | 274 | ||
Airbus A319-100 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,021 | 1 | ||
Total | 1 | ||
Airbus A320-200 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,020 | 8 | ||
2,021 | 3 | ||
2,022 | 3 | ||
2,023 | 6 | ||
Thereafter | 15 | ||
Total | 35 | ||
Airbus A320-200neo | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
Thereafter | 6 | ||
Total | 6 | ||
Airbus A321-200 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,020 | 2 | ||
2,021 | 1 | ||
2,022 | 1 | ||
2,023 | 8 | ||
Thereafter | 22 | ||
Total | 34 | ||
Airbus A321-200 neo | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,020 | 1 | ||
2,021 | 1 | ||
Thereafter | 12 | ||
Total | 14 | ||
Airbus A330-200 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,019 | 2 | ||
2,021 | 1 | ||
2,022 | 2 | ||
2,023 | 3 | ||
Thereafter | 7 | ||
Total | 15 | ||
Airbus A330-300 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,022 | 2 | ||
2,023 | 1 | ||
Thereafter | 2 | ||
Total | 5 | ||
Airbus A330-900neo | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
Thereafter | 1 | ||
Total | 1 | ||
Airbus A350-900 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
Thereafter | 6 | ||
Total | 6 | ||
Boeing 737-700 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,019 | 1 | ||
2,021 | 1 | ||
2,023 | 2 | ||
Total | 4 | ||
Boeing 737-800 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,019 | 2 | ||
2,020 | 3 | ||
2,021 | 9 | ||
2,022 | 11 | ||
2,023 | 13 | ||
Thereafter | 60 | ||
Total | 98 | ||
Boeing 737-8 MAX | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
Thereafter | 14 | ||
Total | 14 | ||
Boeing 777-200ER | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,022 | 1 | ||
Total | 1 | ||
Boeing 777-300ER | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,021 | 3 | ||
2,022 | 4 | ||
2,023 | 4 | ||
Thereafter | 13 | ||
Total | 24 | ||
Boeing 787- 9 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
Thereafter | 15 | ||
Total | 15 | ||
Embraer E190 | |||
Minimum future rentals on non-cancelable operating leases of flight equipment | |||
2,020 | 1 | ||
Total | 1 |
Concentration of Risk (Details)
Concentration of Risk (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)aircraftcountrycustomerlease | Dec. 31, 2017USD ($)aircraftcountrycustomerlease | Dec. 31, 2016USD ($) | |
Concentration of risk | |||
Number of aircraft leased | lease | 94 | 91 | |
Number of countries | country | 56 | 55 | |
Minimum percentage of aircraft operated internationally based on net book value | 95.00% | ||
Number of aircraft sold or agreed to be sold | aircraft | 12 | 0 | |
Net Book Value | $ 15,707,110 | $ 13,280,250 | |
Amount of Rental Revenue | $ 1,631,200 | 1,450,735 | $ 1,339,002 |
Aircraft Held For Sale | |||
Concentration of risk | |||
Number of aircraft sold or agreed to be sold | aircraft | 6 | ||
Net book value of aircraft portfolio | Geographic Region | |||
Concentration of risk | |||
Net Book Value | $ 15,707,110 | $ 13,280,250 | |
Percent of Total | 100.00% | 100.00% | |
Net book value of aircraft portfolio | Geographic Region | Europe | |||
Concentration of risk | |||
Net Book Value | $ 4,692,341 | $ 4,205,431 | |
Percent of Total | 29.90% | 31.70% | |
Net book value of aircraft portfolio | Geographic Region | Asia (excluding China) | |||
Concentration of risk | |||
Net Book Value | $ 3,846,785 | $ 2,981,339 | |
Percent of Total | 24.50% | 22.40% | |
Net book value of aircraft portfolio | Geographic Region | China | |||
Concentration of risk | |||
Net Book Value | $ 2,663,903 | $ 2,720,124 | |
Percent of Total | 17.00% | 20.50% | |
Net book value of aircraft portfolio | Geographic Region | The Middle East And Africa | |||
Concentration of risk | |||
Net Book Value | $ 1,952,900 | $ 1,481,825 | |
Percent of Total | 12.40% | 11.20% | |
Net book value of aircraft portfolio | Geographic Region | Central America, South America And Mexico | |||
Concentration of risk | |||
Net Book Value | $ 1,078,900 | $ 926,732 | |
Percent of Total | 6.90% | 7.00% | |
Net book value of aircraft portfolio | Geographic Region | U.S. and Canada | |||
Concentration of risk | |||
Net Book Value | $ 757,884 | $ 599,367 | |
Percent of Total | 4.80% | 4.50% | |
Net book value of aircraft portfolio | Geographic Region | Pacific, Australia and New Zealand | |||
Concentration of risk | |||
Net Book Value | $ 714,397 | $ 365,432 | |
Percent of Total | 4.50% | 2.70% | |
Number of customers | Geographic Region | |||
Concentration of risk | |||
Number of Customers | customer | 94 | 91 | |
Percent of Total | 100.00% | 100.00% | |
Number of customers | Geographic Region | Europe | |||
Concentration of risk | |||
Number of Customers | customer | 33 | 31 | |
Percent of Total | 35.10% | 34.00% | |
Number of customers | Geographic Region | Asia (excluding China) | |||
Concentration of risk | |||
Number of Customers | customer | 18 | 18 | |
Percent of Total | 19.10% | 19.80% | |
Number of customers | Geographic Region | China | |||
Concentration of risk | |||
Number of Customers | customer | 9 | 9 | |
Percent of Total | 9.60% | 9.90% | |
Number of customers | Geographic Region | The Middle East And Africa | |||
Concentration of risk | |||
Number of Customers | customer | 11 | 11 | |
Percent of Total | 11.80% | 12.10% | |
Number of customers | Geographic Region | Central America, South America And Mexico | |||
Concentration of risk | |||
Number of Customers | customer | 10 | 9 | |
Percent of Total | 10.60% | 9.90% | |
Number of customers | Geographic Region | U.S. and Canada | |||
Concentration of risk | |||
Number of Customers | customer | 10 | 11 | |
Percent of Total | 10.60% | 12.10% | |
Number of customers | Geographic Region | Pacific, Australia and New Zealand | |||
Concentration of risk | |||
Number of Customers | customer | 3 | 2 | |
Percent of Total | 3.20% | 2.20% | |
Flight equipment revenue | Geographic Region | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 1,631,200 | $ 1,450,735 | $ 1,339,002 |
Percent of Total | 100.00% | 100.00% | 100.00% |
Flight equipment revenue | Geographic Region | Europe | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 476,515 | $ 450,628 | $ 400,491 |
Percent of Total | 29.20% | 31.10% | 29.90% |
Flight equipment revenue | Geographic Region | Asia (excluding China) | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 412,465 | $ 332,284 | $ 308,658 |
Percent of Total | 25.30% | 22.90% | 23.10% |
Flight equipment revenue | Geographic Region | China | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 329,977 | $ 324,147 | $ 293,206 |
Percent of Total | 20.20% | 22.30% | 21.90% |
Flight equipment revenue | Geographic Region | The Middle East And Africa | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 179,497 | $ 116,799 | $ 106,300 |
Percent of Total | 11.00% | 8.10% | 7.90% |
Flight equipment revenue | Geographic Region | Central America, South America And Mexico | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 108,736 | $ 102,205 | $ 112,068 |
Percent of Total | 6.70% | 7.00% | 8.40% |
Flight equipment revenue | Geographic Region | U.S. and Canada | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 77,678 | $ 76,685 | $ 69,918 |
Percent of Total | 4.80% | 5.30% | 5.20% |
Flight equipment revenue | Geographic Region | Pacific, Australia and New Zealand | |||
Concentration of risk | |||
Amount of Rental Revenue | $ 46,332 | $ 47,987 | $ 48,361 |
Percent of Total | 2.80% | 3.30% | 3.60% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
State | $ 492 | $ 380 | $ 30 |
Foreign | 2,839 | 3,853 | 848 |
Deferred: | |||
Federal | 125,160 | (150,850) | 203,882 |
State | 812 | (5) | 553 |
Provision for income taxes | 129,303 | (146,622) | 205,313 |
Differences between the provision for income taxes and income taxes at the federal statutory income tax rate | |||
Income taxes at statutory federal rate | 134,429 | 213,336 | 203,083 |
Impact of tax legislation | (354,127) | ||
Foreign tax credit | (9,600) | (10,873) | |
State income taxes, net of federal income tax effect and other | 4,474 | 5,042 | 2,230 |
Provision for income taxes | $ 129,303 | $ (146,622) | $ 205,313 |
Differences between effective tax rate and federal statutory income tax rate | |||
Income taxes at statutory federal rate (as a percent) | 21.00% | 35.00% | 35.00% |
Impact of tax legislation (as a percent) | (58.10%) | ||
Foreign tax credit (as a percent) | (1.50%) | (1.80%) | |
State income taxes, net of federal income tax effect and other (as a percent) | 0.70% | 0.90% | 0.40% |
Provision for income taxes (as a percent) | 20.20% | (24.00%) | 35.40% |
Assets (Liabilities) | |||
Equity compensation | $ 11,951 | $ 12,744 | |
Net operating losses | 17 | 10,143 | |
Foreign tax credit | 2,425 | 14,577 | |
Rents received in advance | 25,165 | 22,076 | |
Accrued bonus | 2,825 | 1,777 | |
Straight-line rents | (320) | (1,967) | |
Other | 1,972 | 1,912 | |
Aircraft depreciation | (687,802) | (579,057) | |
Net deferred tax assets/(liabilities) | (643,767) | (517,795) | |
Thereafter | 244 | ||
Total carryforwards | 244 | ||
Thereafter | 2,425 | ||
Tax Credit Carryforwards, Total | 2,425 | ||
State | |||
Assets (Liabilities) | |||
Total carryforwards | $ 200 | 54,100 | |
Accounting Standards Update 2016 - 09 | |||
Other disclosures | |||
Cumulative effect adjustment upon adoption of ASU 2016-09 | $ 458 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Feb. 21, 2019lease | Dec. 31, 2018USD ($)itemaircraft | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Commitments to acquire aircraft | ||||
Minimum aircraft delivery delays that could trigger lessee cancellation clauses (in years) | 1 year | |||
Lease contracts, subject to cancellation | lease | 0 | |||
Commitments for the acquisition of the aircraft and other equipment | ||||
2019 | $ | $ 6,128,796 | |||
2020 | $ | 6,065,522 | |||
2021 | $ | 5,733,510 | |||
2022 | $ | 5,243,482 | |||
2023 | $ | 2,896,500 | |||
Thereafter | $ | 221,130 | |||
Total | $ | 26,288,940 | |||
Office Lease | ||||
Office lease expense, net of sublease income | $ | 2,900 | $ 2,300 | $ 2,200 | |
Commitments for minimum rentals under the non-cancelable lease term | ||||
2019 | $ | 3,358 | |||
2020 | $ | 5,558 | |||
2021 | $ | 5,795 | |||
2022 | $ | 6,201 | |||
2023 | $ | 6,396 | |||
Thereafter | $ | 38,909 | |||
Total | $ | $ 66,217 | |||
Aircrafts | ||||
Commitments to acquire aircraft | ||||
2,019 | 78 | |||
2,020 | 83 | |||
2,021 | 75 | |||
2,022 | 77 | |||
2,023 | 54 | |||
Thereafter | 5 | |||
Total | 372 | |||
Commitments for the acquisition of the aircraft and other equipment | ||||
Deposit Assets | $ | $ 1,800,000 | $ 1,600,000 | ||
Airbus A320/321neo | ||||
Commitments to acquire aircraft | ||||
2,019 | 25 | |||
2,020 | 40 | |||
2,021 | 22 | |||
2,022 | 25 | |||
2,023 | 25 | |||
Total | 137 | |||
Number of long-range variants | item | 57 | |||
Airbus A330-900neo | ||||
Commitments to acquire aircraft | ||||
2,019 | 9 | |||
2,020 | 2 | |||
2,021 | 5 | |||
2,022 | 6 | |||
2,023 | 2 | |||
Total | 24 | |||
Airbus A350-900/1000 | ||||
Commitments to acquire aircraft | ||||
2,019 | 4 | |||
2,020 | 3 | |||
2,021 | 6 | |||
2,022 | 3 | |||
2,023 | 2 | |||
Total | 18 | |||
Boeing 737-7/8/9 MAX | ||||
Commitments to acquire aircraft | ||||
2,019 | 28 | |||
2,020 | 28 | |||
2,021 | 34 | |||
2,022 | 34 | |||
2,023 | 25 | |||
Thereafter | 5 | |||
Total | 154 | |||
Boeing 787-9/10 | ||||
Commitments to acquire aircraft | ||||
2,019 | 12 | |||
2,020 | 10 | |||
2,021 | 8 | |||
2,022 | 9 | |||
Total | 39 | |||
Airbus A330-300 | ||||
Commitments to acquire aircraft | ||||
Additional purchase commitments | 2 | |||
Airbus A350-1000 | Maximum | ||||
Commitments for the acquisition of the aircraft and other equipment | ||||
Aircraft to be acquired under non-binding commitment | 5 | |||
Boeing 737-8 MAX Aircraft | Maximum | ||||
Commitments for the acquisition of the aircraft and other equipment | ||||
Aircraft to be acquired under non-binding commitment | 45 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2018USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Anti-dilutive securities | |||||||||||
Number of classes of common stock | item | 2 | ||||||||||
Numerator | |||||||||||
Net income | $ | $ 138,399 | $ 146,574 | $ 115,211 | $ 110,651 | $ 471,102 | $ 99,188 | $ 100,925 | $ 84,937 | $ 510,835 | $ 756,152 | $ 374,925 |
Denominator | |||||||||||
Weighted-average common shares outstanding | 104,716,301 | 103,189,175 | 102,801,161 | ||||||||
Basic net income per share (in dollars per share) | $ / shares | $ 1.29 | $ 1.41 | $ 1.11 | $ 1.07 | $ 4.56 | $ 0.96 | $ 0.98 | $ 0.83 | $ 4.88 | $ 7.33 | $ 3.65 |
Numerator | |||||||||||
Net income | $ | $ 138,399 | $ 146,574 | $ 115,211 | $ 110,651 | $ 471,102 | $ 99,188 | $ 100,925 | $ 84,937 | $ 510,835 | $ 756,152 | $ 374,925 |
Assumed conversion of convertible senior notes | $ | 6,219 | 5,842 | 5,780 | ||||||||
Net income plus assumed conversions | $ | $ 517,054 | $ 761,994 | $ 380,705 | ||||||||
Denominator | |||||||||||
Number of shares used in basic computation | 104,716,301 | 103,189,175 | 102,801,161 | ||||||||
Weighted-average effect of dilutive securities (in shares) | 7,647,030 | 8,468,389 | 7,997,566 | ||||||||
Number of shares used in per share computation | 112,363,331 | 111,657,564 | 110,798,727 | ||||||||
Diluted net income per share (in dollars per share) | $ / shares | $ 1.24 | $ 1.32 | $ 1.04 | $ 1 | $ 4.22 | $ 0.90 | $ 0.92 | $ 0.78 | $ 4.60 | $ 6.82 | $ 3.44 |
Restricted Stock Units | |||||||||||
Anti-dilutive securities | |||||||||||
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares) | 931,943 | 1,085,049 | 1,005,697 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Recurring and Non-recurring (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Recurring basis | ||
Fair Value Measurements | ||
Assets | $ 0 | $ 0 |
Liabilities | 0 | 0 |
Non-recurring basis | ||
Fair Value Measurements | ||
Assets | 0 | 0 |
Liabilities | $ 0 | $ 0 |
Fair Value Measurements - Debt
Fair Value Measurements - Debt Financing (Details) - USD ($) $ in Billions | Dec. 31, 2018 | Dec. 31, 2017 |
Book Value | ||
Financial Instruments Not Measured at Fair Value | ||
Debt financing | $ 11.7 | $ 9.8 |
Level 2 | ||
Financial Instruments Not Measured at Fair Value | ||
Debt financing | $ 11.4 | $ 10 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Options (Details) $ / shares in Units, $ in Thousands | May 07, 2014shares | Dec. 31, 2018USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares |
Equity Incentive Plan 2010 | |||||
Stock-based Compensation | |||||
Shares included in the authorized shares which was previously reserved for issuance | 643,135 | ||||
Shares | |||||
Granted (in shares) | 0 | ||||
Equity Incentive Plan 2014 | |||||
Stock-based Compensation | |||||
Number of shares authorized | 5,643,135 | ||||
Employee and Directors Stock Options | |||||
Stock-based Compensation | |||||
Term of award | 10 years | ||||
Vesting period | 3 years | ||||
Stock-based compensation | $ | $ 0 | $ 0 | $ 0 | ||
Unrecognized compensation cost | $ | $ 0 | $ 0 | $ 0 | ||
Shares | |||||
Balance at the beginning of the period (in shares) | 2,858,158 | 3,308,158 | 3,309,158 | ||
Exercised (in shares) | (237,863) | (450,000) | (1,000) | ||
Balance at the end of the period (in shares) | 2,620,295 | 2,858,158 | 3,308,158 | 3,309,158 | |
Vested and exercisable at the end of the period (in shares) | 2,620,295 | ||||
Exercise Price | |||||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 20.37 | $ 20.40 | $ 20.40 | ||
Exercised (in dollars per share) | $ / shares | 20 | 20.59 | 20 | ||
Balance at the end of the period (in dollars per share) | $ / shares | 20.40 | $ 20.37 | $ 20.40 | $ 20.40 | |
Vested and exercisable at the end of the period (in dollars per share) | $ / shares | $ 20.40 | ||||
Remaining Contractual Term | |||||
Remaining Contractual Term (in years) | 1 year 5 months 27 days | 2 years 5 months 27 days | 3 years 6 months | 4 years 6 months | |
Vested and exercisable | 1 year 5 months 27 days | ||||
Aggregate Intrinsic Value | |||||
Balance at the beginning of the period | $ | $ 79,230 | $ 46,086 | $ 43,287 | ||
Exercised | $ | 5,505 | 9,397 | 14 | ||
Balance at the end of the period | $ | 25,697 | 79,230 | 46,086 | $ 43,287 | |
Vested and exercisable at the end of the period | $ | $ 25,697 | ||||
Restricted Stock Units | |||||
Stock-based Compensation | |||||
Number of different vesting criteria | item | 4 | ||||
Stock-based compensation | $ | $ 17,500 | $ 19,800 | $ 16,900 | ||
Unrecognized compensation cost | $ | $ 17,100 | ||||
Number of shares granted | 1,055,325 | ||||
Restricted Stock Units | Vesting Tranche One | |||||
Stock-based Compensation | |||||
Vesting period | 3 years | ||||
Restricted Stock Units | Minimum | Vesting Tranche Two | |||||
Stock-based Compensation | |||||
Vesting period | 1 year | ||||
Restricted Stock Units | Maximum | Vesting Tranche Two | |||||
Stock-based Compensation | |||||
Vesting period | 2 years | ||||
Restricted Stock With Book Value Conditions | |||||
Stock-based Compensation | |||||
Number of types of book value RSUs | item | 2 | ||||
Restricted Stock With Book Value Conditions | Vesting Tranche One | |||||
Stock-based Compensation | |||||
Vesting period | 3 years | ||||
Restricted Stock With Book Value Conditions | Vesting Tranche Two | |||||
Stock-based Compensation | |||||
Vesting period | 3 years | ||||
Restricted Stock With Book Value Conditions | Minimum | Vesting Tranche Two | |||||
Stock-based Compensation | |||||
Percentage of shares vested | 0.00% | ||||
Restricted Stock With Book Value Conditions | Maximum | Vesting Tranche Two | |||||
Stock-based Compensation | |||||
Percentage of shares vested | 200.00% | ||||
Restricted Stock With Total Shareholder Return Conditions | |||||
Stock-based Compensation | |||||
Vesting period | 3 years | ||||
Percentage of shares vested | 100.00% | ||||
Number of shares granted | 533,187 | ||||
Restricted Stock With Total Shareholder Return Conditions | Minimum | |||||
Stock-based Compensation | |||||
Percentage of shares vested | 0.00% | ||||
Restricted Stock With Total Shareholder Return Conditions | Maximum | |||||
Stock-based Compensation | |||||
Percentage of shares vested | 200.00% |
Stock-based Compensation - St_2
Stock-based Compensation - Stock Option Exercise Price (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
$ 20 | |
Stock options exercisable and vested by exercise price range | |
Exercise price (in dollars per share) | $ / shares | $ 20 |
Options Outstanding | |
Number of Shares | 2,500,295 |
Weighted-Average Remaining Life | 1 year 5 months 12 days |
Stock options exercisable and vested | |
Number of Shares | 2,500,295 |
Weighted-Average Remaining Life (in years) | 1 year 5 months 12 days |
$ 28.80 | |
Stock options exercisable and vested by exercise price range | |
Exercise price (in dollars per share) | $ / shares | $ 28.80 |
Options Outstanding | |
Number of Shares | 120,000 |
Weighted-Average Remaining Life | 2 years 3 months 26 days |
Stock options exercisable and vested | |
Number of Shares | 120,000 |
Weighted-Average Remaining Life (in years) | 2 years 3 months 26 days |
$20.00 - $28.80 | |
Options Outstanding | |
Number of Shares | 2,620,295 |
Weighted-Average Remaining Life | 1 year 5 months 27 days |
Stock options exercisable and vested | |
Number of Shares | 2,620,295 |
Weighted-Average Remaining Life (in years) | 1 year 5 months 27 days |
Minimum | $20.00 - $28.80 | |
Stock options exercisable and vested by exercise price range | |
Exercise price (in dollars per share) | $ / shares | $ 20 |
Maximum | $20.00 - $28.80 | |
Stock options exercisable and vested by exercise price range | |
Exercise price (in dollars per share) | $ / shares | $ 28.80 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Restricted Stock Units | |
Unvested Restricted Stock Units, Number of Shares | |
Unvested at the beginning of the period (in shares) | 1,163,700 |
Granted (in shares) | 379,480 |
Vested (in shares) | (430,788) |
Forfeited/canceled (in shares) | (57,067) |
Unvested at the end of the period (in shares) | 1,055,325 |
Expected to vest after the end of the period (in shares) | 1,090,838 |
Unvested Restricted Stock Units, Weighted-Average Grant-Date Fair Value | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 40.24 |
Granted (in dollars per share) | $ / shares | 47.26 |
Vested (in dollars per share) | $ / shares | 42.26 |
Forfeited/canceled (in dollars per share) | $ / shares | 45.41 |
Unvested at the end of the period (in dollars per share) | $ / shares | 41.66 |
Expected to vest after the end of the period (in dollars per share) | $ / shares | $ 41.70 |
Stock-based compensation expense | |
Unrecognized compensation cost | $ | $ 17.1 |
Weighted-average period of recognition of unrecognized stock-based compensation cost | 1 year 8 months 5 days |
2019 (in shares) | 437,884 |
2020 (in shares) | 321,590 |
2021 (in shares) | 331,364 |
Restricted Stock With Total Shareholder Return Conditions | |
Unvested Restricted Stock Units, Number of Shares | |
Granted (in shares) | 90,761 |
Investments (Details)
Investments (Details) $ in Millions | Jan. 01, 2019aircraft | Aug. 01, 2018aircraft | Mar. 31, 2019aircraft | Dec. 31, 2018USD ($)aircraftitem | Dec. 31, 2017USD ($)aircraft |
Investments | |||||
Number of aircraft sold or agreed to be sold | 12 | 0 | |||
Blackbird I and Blackbird II | |||||
Investments | |||||
Number of joint ventures | item | 2 | ||||
Percentage of equity ownership | 9.50% | ||||
Equity method investment | $ | $ 40.6 | $ 35.6 | |||
Blackbird Capital II | |||||
Investments | |||||
Percentage of equity ownership | 9.50% | ||||
Total unfunded commitment | $ | $ 30.5 | ||||
Thunderbolt II | |||||
Investments | |||||
Non-controlling interest (as a percent) | 5.10% | 5.10% | |||
Cost Method Investments | $ | $ 5.4 | ||||
Aircraft Held For Sale | |||||
Investments | |||||
Number of aircraft | 18 | 6 | |||
Number of aircraft sold or agreed to be sold | 6 | ||||
Aircraft Held For Sale | Thunderbolt II | |||||
Investments | |||||
Non-controlling interest (as a percent) | 5.10% | ||||
Forecast | Aircraft Held For Sale | |||||
Investments | |||||
Number of aircraft | 6 | ||||
Number of aircraft sold or agreed to be sold | 6 |
Flight Equipment held for sale
Flight Equipment held for sale (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019aircraft | Dec. 31, 2018USD ($)aircraft | Dec. 31, 2017aircraft | |
Flight Equipment Held for Sale | |||
Number of aircraft sold or agreed to be sold | 12 | 0 | |
Aircraft Held For Sale | |||
Flight Equipment Held for Sale | |||
Number of aircraft sold or agreed to be sold | 6 | ||
Flight Equipment, Net | $ | $ 241.6 | ||
Aircraft Held For Sale | Forecast | |||
Flight Equipment Held for Sale | |||
Number of aircraft sold or agreed to be sold | 6 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data (unaudited) | |||||||||||
Revenues | $ 449,981 | $ 450,698 | $ 397,814 | $ 381,209 | $ 398,471 | $ 376,765 | $ 380,957 | $ 360,187 | $ 1,679,702 | $ 1,516,380 | $ 1,419,055 |
Income before taxes | 172,028 | 179,382 | 147,409 | 141,319 | 165,664 | 154,119 | 155,869 | 133,878 | 640,138 | 609,530 | 580,238 |
Net income | $ 138,399 | $ 146,574 | $ 115,211 | $ 110,651 | $ 471,102 | $ 99,188 | $ 100,925 | $ 84,937 | $ 510,835 | $ 756,152 | $ 374,925 |
Net income per share: | |||||||||||
Basic (in dollars per share) | $ 1.29 | $ 1.41 | $ 1.11 | $ 1.07 | $ 4.56 | $ 0.96 | $ 0.98 | $ 0.83 | $ 4.88 | $ 7.33 | $ 3.65 |
Diluted (in dollars per share) | $ 1.24 | $ 1.32 | $ 1.04 | $ 1 | $ 4.22 | $ 0.90 | $ 0.92 | $ 0.78 | $ 4.60 | $ 6.82 | $ 3.44 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 20, 2019 | Feb. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 01, 2019 | Jan. 31, 2019 | Mar. 31, 2018 |
Subsequent Events | ||||||||
Quarterly cash dividends on common stock | $ 0.43 | $ 0.325 | $ 0.225 | |||||
Revolving Credit Facility | ||||||||
Subsequent Events | ||||||||
Maximum borrowing capacity | $ 4,700 | $ 4,100 | ||||||
Subsequent Event | Senior Unsecured Notes 4.250 Percent Due 2024 | ||||||||
Subsequent Events | ||||||||
Principal amount issued | $ 700 | |||||||
Interest rate (as a percent) | 4.25% | |||||||
Subsequent Event | Revolving Credit Facility | ||||||||
Subsequent Events | ||||||||
Revolving unsecured bank commitments | $ 135 | |||||||
Maximum borrowing capacity | $ 4,700 | |||||||
Subsequent Event | Dividend Declared | ||||||||
Subsequent Events | ||||||||
Quarterly cash dividends on common stock | $ 0.13 |